Welcome to The Corner. In this issue, we break down the House antitrust subcommittee’s report on Big Tech and showcase Barry Lynn’s keynote speech to the OECD exposing the damage done to the world economy by neoliberal ideology.
Landmark House Report Details Big Tech’s Years of Antitrust Violations and Anti-Competitive Conduct
After 16 months, the House Subcommittee on Antitrust, Commercial, and Administrative Law released on Oct. 6 its long-awaited report on Big Tech. The report presents a surfeit of damning evidence against the tech giants and clearly shows that many of the actions of Google, Amazon, and Facebook were intentionally predatory and sought to undermine competition. The Open Markets Institute last week issued this statement applauding Chairman David Cicilline and the subcommittee staff for their work, which resulted in the most important investigation of private corporate power in America in more than a century.
The subcommittee’s conclusion is blunt: The actions of Google, Amazon, Facebook, and Apple have “diminished consumer choice, eroded innovation and entrepreneurship in the U.S. economy, weakened the vibrancy of the free and diverse press, and undermined Americans’ privacy.”
Beginning after the election, Congress and enforcement agencies will likely use the report as a guide for legislation and the strengthened enforcement of anti-monopoly law. The 449-page House subcommittee report includes evidence from more than one million documents and seven hearings and other roundtables.
The House report was shaped in a variety of ways by Open Markets’ vanguard reporting and analysis over the last decade. For instance, the House report focused extensively on how Google privileged its own products and services by manipulating search results and by imposing restrictions on device manufacturers, to force them to incorporate Google’s services into their products. Amazon engages in similar self-preferencing, promoting its own branded products on Amazon Marketplace. In recent testimony to the Senate, Open Markets Enforcement Director Sally Hubbard laid out in detail how Google and Amazon abused their dominant positions for self-preferencing.
The report also proposed powerful remedies, including structural breakups, nondiscrimination, and bright-line rules to simplify antitrust enforcement. Open Markets Legal Director Sandeep Vaheesan has written several prominent op-eds advocating bright-linemerger and agency rules to improve enforcement and ensure that firms compete fairly in the market.
The report also describes how Amazon used its dominant market power to extract ruinous terms in the U.S. market for books. And it details how even large corporations dare not speak out in response to such abuse of power, for fear that the platforms will punish them for doing so. Both of these issues were main topics in Barry Lynn’s seminal 2012 article “Killing the Competition” in Harper’s.
The report’s recommendations offer a detailed blueprint for restoring open and competitive markets. Indeed, as the Department of Justice prepares to file an antitrust lawsuit against Google, the report makes clear that law enforcers will have ample evidence to prove that Google — and Big Tech more generally — has used its power in ways that pose dangers to our economy and democracy.
At OECD Conference, Barry Lynn Delivers Keynote Exposing Damage Done by Neoliberal Ideology
In his speech, Lynn described how the neoliberal philosophy had overthrown “the ideological foundations of the American republic” and affected “every nation in Europe, every democracy in the world.” Lynn also condemned the neoliberal revolution for empowering “private actors in ways that led them to destroy vital human systems of production, communication, innovation, decision, and thought.” The speech was based in part on Lynn’s new book, Liberty from All Masters.
Other notable participants included the economists Thomas Piketty and Kenneth Rogoff, Andy Haldane of the Bank of England, and Tyler Goodspeed, acting chairman of the Council of Economic Advisers.
🔊 ANTI-MONOPOLY RISING:
· The European Commission settled a lawsuit with U.S. chipmaker Broadcom last week to end its exclusive dealing agreements to supply computer chips to manufacturers of TV set-top boxes and internet modems. The commission had found that Broadcom used its market power to coerce manufacturers to sign these agreements. The commission concluded that the agreements marginalized dependent manufacturers and excluded new entrants from the chipmaking market. (European Commission)
· The Department of Justice fined chicken producer Pilgrim’s Pride $110 million on Wednesday for fixing the prices of broiler chicken products. This is the third time since June that a chicken producer was caught price-fixing by the department. (Industry Week)
📝 WHAT WE’VE BEEN UP TO:
· Open Markets Institute filed an amicus brief with the Seventh Circuit Court of Appeals in the case of UFCW Local 1500 Welfare Fund v. AbbVie, Inc. AbbVie was sued for violating patent law by building a thicket of patents around the rheumatoid arthritis medication Humira — the world’s bestselling drug — to prevent generic competition for decades, far beyond the legal limits of patent protection. Read more in our press release.
· Open Markets Institute joined a long list of organizations filing an amicus brief in support of California’s pro-worker case against Uber and Lyft. The brief emphasizes how Uber and Lyft’s misclassification of drivers subjects the drivers not just to serious financial hardship, but also to harassment, assault, and even safety violations. Read more in our press release.
· Sally Hubbard published a piece in Pro Market analyzing how digital markets would look if they were open and competitive.
· Daniel Hanley published an article in the Washington Monthly explaining how the Federal Communications Commission has several anti-monopoly powers that it can use to invigorate competition in the telecommunications sector.
· Sally Hubbard was interviewed by Yahoo! Finance about her testimony before Congress and the importance of antitrust enforcement.
· Barry Lynn was quoted in CNET discussing how the surging anti-monopoly movement has shaped the 2020 presidential campaigns. "No matter who wins in November, this fight against Google, Facebook and Amazon, this anti-monopoly movement, has reached a level of maturity. There’s almost nothing the folks in Washington could do to stop it," Lynn said.
· Sally Hubbard was quoted in Reuters saying that she did not want a potential Biden administration to repeat the Obama administration’s hands-off approach to antitrust enforcement.
· Sandeep Vaheesan was quoted in an article in Barron’sarguing for a racially diverse Biden administration that doesn’t rely on corporate personnel. Vaheesan was quoted saying that a popular movement against corporate domination would “redistribute power downward from a class of mostly white economic royalists to the multiracial majority in American society.”
· Open Markets Institute was mentioned in The Washington Post, in an op-ed by Katrina vanden Heuvel, as an organization that had provided the intellectual and policy scholarship underpinning the conclusions of the House report.
· Open Markets Institute was mentioned in MSSP Alert as a co-signatory of an open letter to Amazon CEO Jeff Bezos. The letter demands that Amazon Web Services transparently explain “at least three cloud security breaches involving voter data from dozens of states and agencies to which it supplies election services.”
· Sally Hubbard was mentioned in articles in The Guardian and S&P Globalabout how regulators could use the House report in a lawsuit against Google. Hubbard said the report “helps build that political will and the political momentum for enforcement of the laws that we do already have."
· Barry Lynn’s new book, Liberty from All Masters, was mentioned in InterConNews Outlet, which explained the harmful effects of Big Tech monopolies.
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📈 VITAL STAT:
The amount of money that the Department of Justice has collected from settlements with pharmaceutical companies, such as Pfizer, that violated anti-kickback prohibitions in recent years. Pharmaceutical corporations pay kickbacks to providers to ensure continued purchases of brand drugs, entrenching Big Pharma monopolies in individual drug markets.
📚 WHAT WE’RE READING:
· “Could Existing Water Pipes Replace Dirty Energy Utilities?”, by Lilli Ambort and John Farrell, Institute for Local and Self Reliance: Ambort and Farrell analyze the possibilities of replacing heating and cooling systems powered by fossil fuels with geothermal water mains. They argue that the transition to this potentially cost-effective system could substantially reduce greenhouse gasses in urban environments.
· “Essential Platforms,” by Nikolas Guggenberger, Stanford Technology Law Review: Guggenberger argues for revitalizing and extending the essential facilities doctrine to apply to digital platforms, to neutralize their monopoly power.
Liberty From All Masters
The New American Autocracy vs. The Will of the People
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 Mastershas 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.
7 Ways Big Corporations Rule Your Life and How to Take Back Control
Simon & Schuster will publish Monopolies Suckby 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. Pre-order your copy here.
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Written and edited by: Barry Lynn, Michael Bluhm, Daniel A. Hanley, Udit Thakur, and Garphil Julien