No images? Click here Welcome to The Corner. In this issue, we take a closer look at Elon Musk’s bid for Twitter, our amicus brief filed in support of the City of Oakland’s antitrust suit against the NFL’s Oakland Raiders, and our comment to the FTC and DOJ on merger enforcement. Musk’s Twitter Play Must Run Gantlet of Agencies Luke Goldstein
The digital townsquare may soon have a new gatekeeper. Two weeks ago, Twitter’s board seemed intent on blocking Elon Musk's bid to take over the corporation. But after the world's richest man patched together financing for a $43 billion dollar cash offer, the board reconsidered. The subsequent deal sent shockwaves around the world. Although Twitter draws significantly less advertising revenue than other platforms like Facebook and carries fewer users, it plays an enormously important role in shaping political discourse. The editorial decisions and content moderation policies it sets have wide-ranging ramifications for the United States and democracies around the world. Billionaires owning major communications channels and media companies isn't new, of course, and Musk may prove to be a better steward of public communications and debate than Facebook or Google. But the prospect of Musk controlling Twitter does raise a number of concerns, due to his extreme laissez-faire views on free speech, notorious online stunts, stock market machinations, and the simple fact that a Musk takeover of Twitter would concentrate enormous power in the hands of one person. And indeed, regulators and lawmakers around the world are already scrutinizing the deal. Another problem is that the deal would create potential conflicts of interest with Musk’s other business operations. Musk already controls a major internet service provider, Starlink, which provides broadband via satellites to a rapidly growing number of customers worldwide, initially mainly in remote areas without reliable internet connections. Starlink already boasts 250,000 customers and has been growing quickly. In many respects, the deal resembles AT&T’s 2017 takeover of TimeWarner, which was strongly opposed by the Department of Justice on the grounds that it would consolidate too much power across related lines of business. Musk’s business ties with foreign countries are another potential concern. One big fear is that China could gain sway over Twitter's policies. In recent years, the government in Beijing has routinely leveraged its market power to force foreign corporations to heed various political commands. Even executives long accustomed to bullying Congress and the executive branch have learned to heed the Chinese government’s commands, including Apple’s Tim Cook, JP Morgan Chase’s Jamie Dimon, and most of Hollywood. In Musk's case, the danger comes from the fact that China is the second-largest market for Musk's electric vehicle company Tesla and a major supplier of the corporation’s lithium batteries and other key components. China banned Twitter in 2009 and the CCP state media outlets are currently either blocked from the site or flagged with extensive content warnings. Scott Kennedy, an expert in Chinese economic policy at the Center for Strategic and International Studies, said in an interview with NBC News, “There certainly is the potential that the Chinese could directly or indirectly put pressure on Musk to constrain how Twitter talks about China. He’s supposed to be a guardian of the public square. That understandably raises questions given how invested Tesla is in China.” There are also questions about how Musk is floating the debt to finance the deal. Initial reports on his financing plans indicate that Musk's takeover will expand Saudi Arabia's already large influence over the platform. Prince Alwaleed bin Talal, the founder of Kingdom Holding Company, the largest private investment holding company in Saudi Arabia, committed $1.9 billion for Musk's takeover and is already a major investor in Twitter. The kingdom has a clear interest in the rules and governance that run Twitter. Saudi Arabia's Crown Prince Mohammed bin Salman has extensively used bot campaigns on the platform to try and shape opinion about his government. With a list of investors that also includes Qatari financiers, Musk’s Twitter deal could draw the scrutiny of the Committee on Foreign Investment in the United States. CFIUS is an interagency committee that reviews large foreign transactions involving U.S. companies to evaluate national security risks. After reviewing a transaction, CFIUS can take its findings directly to the president, who can then block the deal. Open Markets Files Amicus Brief in City of Oakland v. Oakland Raiders
On April 11, the Open Markets Institute filed an amicus brief in City of Oakland v. Oakland Raiders. The City of Oakland filed an antitrust suit against the Raiders and the National Football League for collusively relocating the team to Las Vegas and preventing Oakland from hosting another NFL team. Although the City suffered substantial economic harm and lost the team beloved to residents (a fan base famously known as “Raider Nation”), the 9th Circuit affirmed dismissal of the City’s complaint on the grounds it did not show antitrust standing. The City of Oakland petitioned the Supreme Court to review the case. In supporting the City’s petition, Open Markets called on the Supreme Court to hear the case and to restore the private remedies Congress established for antitrust violations. Open Markets Submits Comment to FTC, DOJ on Merger Enforcement
Open Markets submitted a comment in April to the Federal Trade Commission and the Department of Justice’s Antitrust Division in response to their request for ideas and information on how to reform their guidelines for shaping merger enforcement. The comments were the culmination of Open Markets’ pioneering work demonstrating the devastating effects of the radical changes in competition philosophy in the early years of the Reagan administration, under the influence of Robert Bork, Richard Posner, and other “Chicago School” theorists. The comment was mentioned in Common Dreams. Read our submission here. Hubbard Joins DOJ Antitrust Division
Last week Sally Hubbard, Open Markets’ director of enforcement strategy, joined the front office staff of the Antitrust Division of the Justice Department. Hubbard will serve as special counsel to Jonathan Kanter, assistant attorney general for the Antitrust Division. During her time at Open Markets, Hubbard testified multiple times before Congress, worked closely with the offices of states’ attorneys general to strengthen antitrust enforcement, and published the book Monopolies Suck: 7 Ways Big Corporations Rule Your Life, with Simon & Schuster. Earlier in her career, Hubbard worked for 10 years as a law enforcer in the antitrust division of the New York state government. Hubbard joins a long list of Open Markets employees and board members who have joined the administration, including FTC Chair Lina Khan, Alexis Goldstein at the Consumer Financial Protection Bureau, and Elizabeth Baltzan at the Office of the United States Trade Representative. 🔊 ANTI-MONOPOLY RISING:
📝 WHAT WE'VE BEEN UP TO:
We appreciate your readership. Please consider making a contribution to support the continued publication of this newsletter. 📈 VITAL STAT:$64 BillionThe five largest container-shipping companies collectively made profits of more than $64 billion last year — an increase of $41 billion from the previous year — according to a report compiled by Accountable.US, a watchdog organization. 📚 WHAT WE'RE READING:
NIKKI USHER'S NEW BOOK
News for the Rich, White, and Blue: How Place and Power Distort American Journalism Nikki Usher, a senior fellow at Open Markets Institute’s Center for Journalism & Liberty, has released her third book, News for the Rich, White, and Blue: How Place and Power Distort American Journalism. In her latest work, Usher offers a frank examination of the inequalities driving not just America’s journalism crisis but also certain portions of the movement to save it. “We need to radically rethink the core functions of journalism, leverage expertise, and consider how to take the best of what the newspaper ethos of journalism can offer to places that have lost geographically specific news, “ says Usher, an associate professor at the University of Illinois-Champaign. “The news that powers democracy can be more inclusive.” Usher is also the author of Making News at The New York Times (2014) and Interactive Journalism: Hackers, Data, and Code (2016). News for the Rich, White, and Blue, published by Columbia University Press, is available as a hardback, paperback and e-book. You can order your copy here. 🔎 TIPS? COMMENTS? SUGGESTIONS? We would love to hear from you—just reply to this e-mail and drop us a line. Give us your feedback, alert us to competition policy news, or let us know your favorite story from this issue. |