Author Topic: Anti-trust law and related issues  (Read 1823 times)

Crafty_Dog

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Anti-trust law and related issues
« on: July 05, 2021, 02:15:45 PM »
Obviously this thread will interact heavily with the Goolag thread, but I'm thinking it deserves a thread of its own.

Kicking it off with and editorial from the WSJ-- for the record I'm not sure whether I agree or disagree:

Lina Khan’s Power Grab at the FTC
The new Chair snatches unilateral authority and rescinds bipartisan Obama-era standards.
By The Editorial Board
July 5, 2021 4:43 pm ET


Independent federal agencies have power over American life that the Founders never imagined, and that reign is about to expand with a vengeance in the Biden era. Witness the unprecedented power grab engineered last week at the Federal Trade Commission by the new chair, Lina Khan.

The events didn’t get much attention because the press cares more about politics than governance. But on a series of 3-2 votes, the Democratic commissioners turned agency tradition upside down and gave themselves vast new powers to harass business.

***
The agency eliminated the long-standing role of the agency’s chief administrative law judge in presiding over fact-finding and rule-making. Now Ms. Khan, or someone of her choosing, will preside. The Democrats also killed the requirement that the FTC staff get a majority vote of the commission to start an investigation. Now only a single commissioner can sign off. Subpoenas can also fly at Ms. Khan’s discretion.

The commissioners rescinded the bipartisan Obama-era FTC statement, adopted in 2015, that the agency follow antitrust law as it has evolved in the courts. This is a sure signal that the three Democrats are planning to dump the consumer-welfare standard for antitrust that has prevailed for decades. Instead the agency will replace it with some new standard it hasn’t specified. Also on the chopping block is the “rule of reason” the Supreme Court has applied to antitrust law for more than a century.

This is the handiwork of Ms. Khan and Rohit Chopra, who is still a commissioner but has been nominated by Mr. Biden to run the Consumer Financial Protection Bureau. Ms. Khan is a 32-year-old academic who has no experience running anything. She helped write the October 2020 House Antitrust Subcommittee report on Big Tech and has called for breaking up large firms. Now she’s teeing up the FTC to stretch its powers in a way it hasn’t done since the 1970s and 1980s before it was rebuked by Congress and the courts.


Ms. Khan and her academic ally Tim Wu, who now works in the White House, claim they are merely restoring proper antitrust law from the intellectual detour pioneered by the late, great Robert Bork. But they ignore that modern antitrust law, with its focus on economic analysis and consumer benefit, has also been nurtured by many others. They include scholars Phillip Areeda and Herbert Hovenkamp and Supreme Court Justice Stephen Breyer.

Ms. Khan appears to reject all of that. She writes fondly of railroad regulation, of all things, which was repudiated by Congress after demonstrable failure. She wants to apply the Robinson-Patman Act of 1936 to Amazon and other giants. That price discrimination law was long ago diminished by the courts with hardly a word of objection from Congress.

Ms. Khan may feel she has the political wind behind her given the anti-Big Tech mood on Capitol Hill. Twenty-one GOP Senators voted to confirm her, including some upset with Big Tech for censoring conservative speech. But they voted to make her a commissioner before President Biden made her Chair—a decision he announced only after her confirmation. That was a clear break with tradition that a nominee for Chair be identified before a Senate vote.

These Republicans may be under the illusion that Ms. Khan has only Big Tech in her sights. But the new powers she is claiming will give her authority to shoot at business in all directions. The FTC is supposed to be mainly an enforcement agency that polices bad practices, but Ms. Khan and her fellow Democratic commissioners want to expand its regulatory powers as well. Watch out for rules on privacy and data-collection for starters that will affect hundreds if not thousands of companies.

The U.S. Chamber of Commerce awoke to criticize the FTC votes last week. But Republicans in Congress are still asleep.

Wide awake is Amazon, which last week filed a petition with the FTC seeking Ms. Khan’s recusal from actions concerning the giant retailer. The petition includes a declaration from Thomas Morgan, one of the country’s foremost experts on legal ethics who was retained by a firm working for Amazon. Mr. Morgan recounts Ms. Khan’s extensive record of hostility to Amazon and thus her inability to fairly judge the facts of an antitrust case.


“The Majority Staff Report in which Chair Khan played a large part in effect asserts that Amazon is guilty of violating the law,” Mr. Morgan writes. “In my opinion, in any future matter tried before the FTC, Amazon is entitled to decision makers who have a more open mind about those issues than Chair Khan would appear to a reasonable observer to have.”

We have no special brief for Amazon and have criticized its dominance in the e-books market. But the point here is about Ms. Khan’s blinkered zealotry. Don’t expect her to take Mr. Morgan’s recusal advice, but the courts may come to a different conclusion. Meanwhile, American business should get ready. The Khan FTC is coming after you.

Crafty_Dog

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Re: Anti-trust law and related issues
« Reply #1 on: July 08, 2021, 08:08:15 PM »
Warning to the Real-Estate Cartel
The Justice Department will take a new look at those outrageous brokers fees.
By Michael Toth
July 8, 2021 6:37 pm ET


The Justice Department backed out last week of a proposed settlement with the National Association of Realtors to take a fresh look at the notoriously high commissions consumers pay real-estate agents. The move sent shock waves through the housing industry. The government occasionally brings an antitrust case and later decides to dismiss it. But never have federal antitrust authorities agreed to a proposed settlement only to back out after receiving public comment.

The real-estate lobby called the move “an unprecedented breach.” But there’s a much larger concern for legacy brokers than the novelty of the about-face. The signal from Washington is that antitrust enforcers are prepared to dismantle the collusive practices that burden U.S. homeowners with brokerage costs two to three times as high as in the rest of the developed world.

As authorities prepare a fresh inquiry, they should give close scrutiny to the bizarre way Americans pay real-estate agents. Unlike any other business, when a homeowner decides to sell, he must agree to pay two agents—his and the buyer’s. It’s a one-of-a-kind arrangement. The buyer agent is supposedly representing the buyer, yet is compensated by the seller. In other agency businesses, each client pays his own agent. If you want a white-shoe law firm to represent you, you can pay for one. But a local practitioner may do just as well, and clients have that option as well. The result is real price competition.

Real estate, by contrast, has a third-party payment system, which produces predictably inflated prices. Many home buyers would pay a lot less than 2.5% to 3% of the price of the home, the standard rate for buyer agents. Last year, 97% of buyers started their home search online, without the assistance of an agent.


Increasingly, home buyers are finding their next home first, and then contacting an agent second. But buyer agent fees can still be as high as $15,000 on the purchase of a $500,000 home because the buyer doesn’t set the price of his agent. The seller does, and he’s pressured to pay to the hilt.


A training manual from one of the nation’s largest brokers lays it all out. It advises agents representing sellers to tell their clients to offer 2.5% to 3% to buyer agents. After all, “if an agent has 10 different houses, nine of which come with a 3% commission, one of which comes with a 2.5% commission, which one do you think they’re going to show?” YouTube contains dozens more videos of similar training from other brokers and real-estate coaches. It’s the way the industry operates and the principal reason real-estate commissions remain at pre-internet levels while transaction costs have hit the floor across the rest of the service economy.

The industry lobby has two defenses for the mandatory commission rules it established decades ago and continues to enforce. The first is that the arrangement has been around so long. But there’s no easement under federal antitrust law for long-running violations. And unlike other current targets of antitrust scrutiny, holding the real-estate industry accountable requires no departure from the well-established consumer-welfare standard. Industry rules have created the most obvious consumer welfare harm—nosebleed prices.

Fans of the outmoded commission structure also claim there’s solace in the fact that it’s the seller who pays the agent fees because at least the buyer doesn’t have to pay. That defies logic. When a home is sold, it’s the buyer who pays. What industry defenders are really saying is that buyers have the privilege of borrowing more money to pay for homes because the inflated cost of agent services are baked into the sale price.

The pandemic real-estate economy has been tough on aspiring home buyers. But help may be on the way.

Mr. Toth is general counsel of REX, a digital real estate startup based in Austin, Texas, which submitted a public comment recommending that the Justice Department back out of the settlement.

ccp

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Lina khan FTC power grab
« Reply #2 on: July 09, 2021, 04:21:46 AM »
32yo Lina Khan:

https://en.wikipedia.org/wiki/Lina_Khan

Columbia and of course Yale

I never realized how many people who control us are all Harvard Yale.........

Crafty_Dog

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Re: Anti-trust law and related issues
« Reply #3 on: July 09, 2021, 05:29:23 AM »
"In the article, Khan argued that the current American antitrust law framework, which focuses on keeping consumer prices down, cannot account for the anticompetitive effects of platform-based business models such as that of Amazon. She proposed alternative approaches for doing so, including "restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties."[4]"

Do you disagree?

ccp

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Re: Anti-trust law and related issues
« Reply #4 on: July 09, 2021, 09:33:13 AM »
"In the article, Khan argued that the current American antitrust law framework, which focuses on keeping consumer prices down, cannot account for the anticompetitive effects of platform-based business models such as that of Amazon. She proposed alternative approaches for doing so, including "restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties."[4]"

Do you disagree?

well I am not sure
i am not happy about her using bureaucratic power to dictate to Amazon or other tech titans
though I would love to see their power reigned in some how and
preferably legislatively and preferably with Republican dominated control of the legislatures

OTOH waiting 2 yrs or 4 may simply not do
But she is likely democrat partisan and would not trust what she does to be be equal justice to both political parties and to the rest of us .

To me that is the problem
  whenever democrats expand their power it is always in ways that benefit them at our expense.

ccp

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Crafty_Dog

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Re: Anti-trust law and related issues
« Reply #6 on: July 10, 2021, 05:37:49 AM »
"preferably with Republican dominated control of the legislatures"

A danger to be on the look out for is that corporate lap dog Reps/the WSJ Wall Street Reps sabotage things.

---------------

I too caught a piece of the Biden speech on his EO and was surprised at how good it sounded.  Agreed, what is the catch?

Crafty_Dog

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Bork's son
« Reply #7 on: July 13, 2021, 02:26:26 AM »
I am on the fence with this; I post it in furtherance of the conversation.

Joe Biden’s Antitrust Paradox: Where’s the Consumer Welfare?
His new competition policy is a power grab that will hurt economic growth and investment.
By Robert H. Bork Jr.
July 12, 2021 1:20 pm ET
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Judge Robert H. Bork at a confirmation hearing for his nomination to the Supreme Court by President Reagan on Capitol Hill, Sept. 15, 1987.
PHOTO: JOHN DURICKA/ASSOCIATED PRESS

‘Forty years ago, we chose the wrong path,” President Biden told Americans on Friday, “following the misguided philosophy of people like Robert Bork, and pulled back on enforcing laws to promote competition.”

What was that path, exactly? And where have these 40 years in the wilderness led us?

These aren’t academic questions for me. I remember my father in the late 1960s working in his cramped attic study in New Haven, Conn., beginning to develop his theory of antitrust law. He was 40, sitting at a desk my mother made from an old door, scribbling with his Scripto mechanical pencil on yellow legal pads, wreathed by a cloud of smoke from the Kent cigarette hanging from the corner of his mouth.

My father taught himself calculus because he believed a specialist in antitrust should understand the complexities of price theory. The product of this decadelong labor and his rigorous study of antitrust was his 1978 masterpiece, “The Antitrust Paradox: A Policy at War with Itself.” By paradox, he meant that laws designed to protect consumers ended up protecting everyone but consumers.

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Earlier in the century, Justice Louis Brandeis had denounced the “curse of bigness” against “small dealers and worthy men.” He thought the law should protect small firms against the predations of larger, more efficient ones. Justice William O. Douglas took up this cudgel in the 1960s and ’70s, thwacking businesses for being too successful. The conclusion of my father’s work was the profound declaration that antitrust law shouldn’t try to decide who is “worthy” or to defend smaller or less efficient competitors. The sole aim of antitrust law is to protect consumers.

Enter Mr. Biden and Lina Khan, the “neo-Brandeisian” newly installed as chairman of the Federal Trade Commission. They are executing a campaign to undo the consumer-welfare standard and replace it with a full-on effort to regulate pharmaceuticals, healthcare, agriculture, telecom, technology and manufacturing. Through a “sweeping” executive order signed Friday, Mr. Biden aims to empower the alphabet of federal agencies to use their authority to second-guess and undo business decisions that could “harm competition.” Should these agencies falter, the new White House Competition Council and Ms. Khan will be there to remind them who is boss.


Mr. Biden’s justification for this sweeping campaign is simple: “We are now 40 years into the experiment of letting giant corporations accumulate more and more power. And what have we gotten from it? Less growth, weakened investment and fewer small businesses.”

Mr. Biden and Ms. Khan could do worse than to follow my father’s example and learn a little math themselves. In Joe Biden’s America, “less growth” means the economy almost tripled in size from 1980 to 2020 under the consumer-welfare standard. Over this time, the World Bank reports that Americans’ per capita income has nearly doubled.

In Joe Biden’s America, a 9.99% inflation-adjusted annual rate of return from 1980 to 2020 is “weakened investment,” although it is more than 2 points above returns during the prior 40 years before the consumer welfare standard. If you had invested $1,000 in the S&P 500 in 1980 and reinvested the dividends, by 2020 you would now have $97,885.

What about “fewer small businesses?” The overall trend under the consumer welfare standard has been strong. But in Joe Biden’s America, a 54% increase in small businesses since 1980 amounts to “fewer small businesses.”

If Mr. Biden can steamroll every industry and protect inefficient, rent-seeking competitors over consumers, his executive order will certainly succeed in transforming America if it is ever backed by statutory force. Sen. Amy Klobuchar (D., Minn.) is pushing a sweeping antitrust bill, a companion to the raft of antitrust bills in the House, to “promote economic equity.” Many Senate Republicans are eager to hop on this train, including Sen. Josh Hawley (R., Mo.), who would outlaw any mergers or acquisitions for the more than 80 large U.S. companies valued over $100 billion. Together, Sens. Klobuchar and Hawley would petrify American capitalism.

There may be enough bipartisan support for Mr. Biden to succeed. His speech was certainly a masterpiece of demagoguery masquerading as common sense. He wrapped his proposal in popular items, from reduced costs for prescription drugs and internet services, to access to low-cost over-the-counter hearing aids. He invoked the legacies of both Roosevelts. Joe Biden may appear small in the shadows of these giants, but if he succeeds, he will have pulled off a government power grab that is at least the equal of the New Deal, without its benefits.


Mr. Biden said “our economy isn’t about people working for capitalism; it is about capitalism working for people.” If Congress and the courts roll over, it will be about working for the government.

Mr. Bork is president of the Washington-based Antitrust Education Project.


DougMacG

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Re: Bork's son
« Reply #8 on: July 13, 2021, 09:03:29 AM »
Crafty:
"I am on the fence with this; I post it in furtherance of the conversation."

Joe Biden’s Antitrust Paradox: Where’s the Consumer Welfare?
His new competition policy is a power grab that will hurt economic growth and investment.
By Robert H. Bork Jr.
------------------------

Doug:
I am on the fence with it also.  I see small government, supply side people like Stephen Moore taking the hands off side of it. 

I want Google, Facebook, Twitter, et al knocked down and constrained out of spite, but I want and expect constitutional jurists to use a higher principle to decide these cases.

If these aren't monopolies, nothing ever could be.  It's all a matter of mostly artificial definitions.  Standard Oil was not a monopoly; people could have run their homes and cars off of fire, or solar, wind, nuclear a hundred years ago; just innovate!

We worried about Exxon Mobil when Saudi Aramco and other state owned enterprises in the market where they operated were bigger.

Regarding the Klobuchar Hawley legislation, companies of that size should be looked at very suspiciously and skeptically during mergers and acquisitions.  There is a role for government enforcing a fair playing field. But the test to block a consensual business transaction needs to focus on market behavior and anti-competitive result, not size alone.



Crafty_Dog

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WT: Anti-trust bill on back burner
« Reply #12 on: August 01, 2022, 06:17:45 AM »
BUSINESS

Antitrust bill against Big Tech on back burner

Opponents fear for American favorites

BY RYAN LOVELACE THE WASHINGTON TIMES

Big Tech’s most ardent critics have gained momentum in pursuit of an antitrust overhaul to curb the power of companies such as Amazon and Google that have become integral to the everyday lives of millions of Americans.

The view that the tech giants are monopolies has united Big Tech’s bipartisan detractors, who say Congress has an uncommon moment to deal a lasting blow. The most viable in the pipeline is the American Innovation and Choice Online Act.

The bill’s supporters say it would make measured and necessary changes to antitrust laws to combat Big Tech. The tech companies and their allies in Congress say Americans rely on and love the products and warn that the legislation would destroy them.

The legislation takes direct aim at Amazon, Apple, Google and Facebook, which now operates as Meta, by seeking to prevent the companies from giving preference to their products on their platforms to the detriment of competitors.

Under the legislation, online platforms with more than 50 million monthly active users or 100,000 U.S.based monthly active users would be blocked from putting their products and services ahead of different businesses if it materially harms competition. Antitrust enforcers from the Federal Trade Commission, the Justice Department and the states would have authority to enforce the law.

Sen. Amy Klobuchar, Minnesota Democrat, has shepherded the bill alongside Sen. Chuck Grassley, Iowa Republican. They revised the legislation in June in hopes of getting it passed this summer.

Rep. David Cicilline, Rhode Island Democrat, and Rep. Ken Buck, Colorado Republican, have stewarded companion legislation in the House.

Ms. Klobuchar said the bill is not designed to break up the companies or ban mergers.

“All they have to do is treat people fairly,” Ms. Klobuchar said last week on the Senate floor. “The way our bill works, [if] they do that, they stay out of trouble. They don’t do it, Justice Department, FTC, state AGs can look at doing something about it.”

Ms. Klobuchar said Amazon is unfair to showcase its products over competitors’ products on its website.

Amazon Vice President Brian Huseman wrote that the bill would jeopardize his company’s ability to keep down prices and offer a wide selection of products.

“Sen. Klobuchar’s vaguely worded bill would mandate that Amazon allow other logistics providers to fulfill Prime orders,” he wrote on Amazon’s website. “Such a mandate would make it difficult, and potentially impossible in practice, for Amazon and our selling partners to offer products with Prime’s free two-day shipping (let alone one-day).”

Ms. Klobuchar has accused Amazon of making misleading claims and urged swift action to pass the bill over Big Tech objections.

The chance of congressional votes on major antitrust legislation against Big Tech before the August recess was jeopardized when Democratic leadership prioritized other business and questions about Senate support lingered.

Mr. Buck pushed for votes on the bill in June. Ms. Klobuchar called for votes before August. In comments to the New York Post, Mr. Grassley signaled last month that he was open to waiting until this fall, if necessary. Ms. Klobuchar’s office did not answer whether her anticipated timeline for the legislation had shifted toward autumn and pointed to her push for an immediate vote.

Senate Majority Leader Charles E. Schumer, New York Democrat, told Punchbowl News in July that he supported the legislation but intended to wait and see whether it had the 60 votes necessary to survive in the upper chamber. The legislation did not appear to have that many votes.

Four Democratic senators raised concerns in June. Sens. Tammy Baldwin of Wisconsin, Ben Ray Lujan of New Mexico, Brian Schatz of Hawaii and Ron Wyden of Oregon expressed fear that the bill would “supercharge harmful content online” by hindering content moderation practices that censor people’s speech.

Some Republicans also cast doubt on the legislation. Sen. Mike Lee of Utah questioned the wisdom of the bill as it advanced through the Judiciary Committee in January.

A coalition of conservative advocacy groups led by the Internet Accountability Project urged the Senate in July to pass the bill immediately.

“Big tech companies have effectively amassed enough power to transcend marketplace consequences,” the coalition said in a letter to senators. “Never before in our country’s modern history have so few people wielded such immense power over the dissemination of information, or had the ability to silence their political or ideological opponents.”

The bill also has been caught up in power plays by the internet giants’ rival tech companies.

Yelp general counsel Aaron Schur wrote in support of the bill in a University of Chicago publication in July. Yelp, the crowdsourced business review site, is a competitor of Google and a witness in the Justice Department’s antitrust case against Google.

The American Enterprise Institute’s Mark Jamison told Mr. Schur that the bill hamstrings tech titans to benefit companies like Yelp. Mr. Jamison previously consulted for Google.

If the U.S. government does not break up Big Tech, its Chinese competition may deliver a deadly blow, particularly via the popular video-based platform TikTok.

Facebook posted its first-ever year-over-year revenue decline in 2022’s second quarter, marking an unprecedented three straight quarters of shrinking profits, according to MarketWatch.

Meta, Facebook’s parent, fell out of the top 10 capitalized companies in the S& P 500 before July’s end, according to CNBC.

TikTok surpassed Facebook and Instagram in users’ time spent scrolling on their platforms in 2020, according to market research company Insider Intelligence. Facebook has made plans to shutter or reevaluate several products, including its newsletter service Bulletin and how it pays news publishers via Facebook News.

Facebook is shifting resources toward products catering to TikTok’s creative audience and facing the prospect of a congressional crackdown. Still, its shift from social media toward a virtual reality “metaverse” business may not escape government regulation.

The FTC said in July that it wants to block Meta from acquiring a popular virtual-reality-dedicated fitness app because Meta has a “virtual reality empire.


Crafty_Dog

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WSJ: The Clayton Act to break up the ESG Investing Giants
« Reply #14 on: August 31, 2022, 04:12:28 PM »
Three of the largest investment shops in the U.S.—BlackRock, Vanguard and State Street—have long used their dominance in passive-investment funds to force corporations to comply with their preferred set of environmental, social and governance policies. Their reign, however, may be nearing its rightful end, as America’s law enforcers are waking up to the threats the Big Three pose to investors and the economy.


In an Aug. 4 letter to BlackRock CEO Larry Fink, 19 state attorneys general questioned how the company’s ESG advocacy squares with its fiduciary duties to investors. The attorneys general specifically raised whether BlackRock’s “coordinated conduct with other financial institutions”—i.e., the two other investing giants—to demonetize the oil-and-gas industry raises potential antitrust issues.

The attorneys general are digging into an important matter, but there is a much more worrying question they must explore: Why are the Big Three pursuing these policies in lockstep? Why have no institutions in the financial-services industry except one—the recently launched Strive Asset Management—opted to place the investor first, by giving priority to profit over social issues? The seeming answer raises concerns far beyond the Big Three’s anti-oil-and-gas collusion.

Through their management of passive investments, the Big Three collectively hold the largest voting blocs for nearly the entire S&P 500. Among them, they control a predominant share of the exchange-traded fund, or ETF, market, and of most participants in nearly every other market. Two of the three (BlackRock and State Street) are publicly traded companies, and so their officers disclose under oath in regular federal filings their institutional shareholders. In this paperwork, they regularly tell us not only what they own, but who owns them.

The answer reads like a punch line: The Big Three own each other and themselves.

Start with Vanguard, the privately held company of the group. Though 100% of Vanguard’s equity is held by its own managed funds, its investors hardly control them. The company’s directors are also the trustees of its funds, tasked with appointing its managers. Those managers are the only “owners” with votes on the membership of Vanguard’s board. It’s difficult to imagine a more circular arrangement.

But the rest of the Big Three come close. Vanguard is the largest owner of BlackRock and State Street, in each case followed by BlackRock. Taken together, the Big Three directly own about 19% of BlackRock and 22% of State Street. The companies also own controlling shares of many of the other institutional stockholders holding the Big Three’s shares. After including those holdings, the Big Three cumulatively control—if indirectly—no less than about 32% of BlackRock’s equity and 42% of State Street’s.


There are good reasons to worry about the downstream effects of the same set of players owning all the competing companies in other industries. Many in the academy have encouraged prosecuting these companies under Section 7 of the Clayton Act—an antitrust statute, enacted in 1914, that bars any stock acquisitions or ownership that “may substantially lessen competition.” Those concerns should be even stronger when the players in question not only own but control each other. The U.S. hasn’t seen this sort of corporate entanglement since Teddy Roosevelt and William Howard Taft busted the original trusts a century ago.

The Big Three’s present relationship explains why none of them defect from the ESG game. They can’t, because they’re not independent actors. The few other genuinely independent actors in the system—such as Fidelity—are privately held and controlled by families wealthy enough to prioritize luxury beliefs over productivity. Similarly, ownership and control explains why no other major player in the American financial-services industry defects and challenges the investing giants. State Street qualifies as one of the 15 largest banks in the U.S. The Big Three collectively hold controlling shares of 13 of the 14 others—with their directly controlled ownership shares ranging from about 17% to 25%, and their indirectly controlled ownership shares ranging from about 24% to 45%. The only exception is the Canadian-owned TD Group.

No substantive competition exists within the ESG paradigm because under the noses of our antitrust regulators the Big Three have acquired shared control over one another and almost every potential competitor. That’s not a situation that can be fixed with probing letters or industry-specific litigation alone. We’re now facing the original problem that Congress wrote American antitrust laws to address—coordinated ownership of everything by concentrated cliques pursuing their own priorities at the expense of the common good.

That demands the targeting and eventual dissolution of the Big Three. The 19 state attorneys general are doing necessary work, but they must aim higher—for the head.

Mr. Morenoff is executive director of the American Civil Rights Project.

Crafty_Dog

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WSJ: FB/Meta
« Reply #15 on: October 29, 2022, 09:13:26 AM »
Facebook Does a Faceplant
Memo to Lina Khan: After losing 70% of its market cap, Meta hardly looks like a monopoly.
By The Editorial BoardFollow
Updated Oct. 28, 2022 8:50 pm ET

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Meta headquarters in Menlo Park, Calif.
PHOTO: TONY AVELAR/ASSOCIATED PRESS

How the Meta has fallen. Who would have predicted a year ago that Exxon Mobil’s market value would be nearly double that of the company formerly known as Facebook? Certainly not the antitrust regulators who sued to break up Mark Zuckerberg’s alleged monopoly.

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Meta’s stock took a 23% dive this week after its third-quarter earnings report showed slowing growth in social media and mounting losses at its virtual-reality division. The company’s market value has fallen $655 billion this year, which knocked it out of the list of top 25 companies in the world by market capitalization.

Other big tech stocks have also sold off this year amid rising interest rates. The Federal Reserve’s bond-buying and negative real interest rates drove investors into growth stocks, which inflated tech valuations. Social-media companies have also been hurt by lower advertising spending as businesses cut marketing budgets amid economic uncertainty.

Meta’s 70% share decline this year is also the result of investors downgrading its growth expectations. Meta is facing social-media competition from TikTok, which is more popular than Facebook and Instagram among the youngest generations. Privacy controls that Apple introduced on its iPhones last year have also limited advertisers’ ability to target users, which has hurt Meta’s ad sales.

Foreseeing these headwinds, Mr. Zuckerberg last fall tripled down on the company’s metaverse bet. The company has plowed $13 billion in the last year into its Reality Labs, which sells virtual-reality headsets and apps that allow users to interact in an alternative universe. But its metaverse has struggled to attract users beyond hard-core video-gamers.


A recent New York Times report said Meta employees this summer proposed marketing VR headsets to Americans who receive student debt relief, hoping this could lift sales. “This is an opportunity for Meta Quest growth, as there is evidence that past Federal Stimulus spurred growth,” an analysis stated. How many of America’s missing workers are lost in the metaverse?

It’s hard to predict how many customers will buy Meta’s new $1,500 virtual-reality headsets. When Facebook in 2012 bought Instagram for $1 billion, many were also skeptical it would deliver. Mr. Zuckerberg could end up making his metaverse fantastically profitable. But the point is that Meta isn’t the monopolist that the Federal Trade Commission claims in its lawsuit to break up the company.

It faces stiff competition from several directions, and Apple is expected to unveil its own virtual-reality headset. Mr. Zuckerberg’s metaverse bet isn’t a guaranteed success. This is one reason the FTC lawsuit this summer to block Meta’s acquisition of VR fitness app developer Within Unlimited is so unpersuasive.

FTC Chair Lina Khan wants to prevent Mr. Zuckerberg from obtaining a metaverse monopoly. But markets seem a lot less certain that he’ll succeed, or even that his alternative universe will be all that profitable.

Crafty_Dog

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WSJ: Barr: Congress must halt Big Tech's Power Grab
« Reply #16 on: January 23, 2023, 07:29:30 AM »
Congress Must Halt Big Tech’s Power Grab
Lawmakers don’t have to rewrite the antitrust laws; instead, these three steps could make a difference.
By William P. Barr
Jan. 22, 2023 3:27 pm ET

Big Tech has far too much power. Lawmakers from both parties agree, but for years Congress has been all talk and no action. Meanwhile, tech giants are threatening to use their control over digital platforms to gain unfair advantage in other markets where competing products depend on access to those platforms.

Over the past 20 years, the scope of commercial and personal activities relying on access to digital platforms has mushroomed. A few giant companies—Google, Apple, Amazon, Facebook—have achieved monopoly or near-monopoly control over key platforms, among them online search and advertising, mobile operating systems, online marketplaces, maps and social media.

All these dominant platforms, though distinctive, pose the same threefold danger. First, they have a chokehold over essential channels of communication and commerce, allowing them to be gatekeepers to the digital world. Second, they vacuum up a trove of personal information about users—what they see, hear, read, think and buy. This raises profound privacy concerns and permits these companies to manipulate users’ beliefs and behavior. Third, they distort the “marketplace of ideas.” The gatekeepers can shape the flow of information to advance their own economic and political agendas.

Case-by-case antitrust litigation alone won’t rein in Big Tech. Unlike regulatory power, which entails actively supervising an overall market and setting uniform rules for it, antitrust litigation is slow. It can target only discrete transactions or instances of wrongdoing by individual companies. That approach can’t produce a coherent response to the multifaceted problems caused by Big Tech’s dominance.

A lot of energy has been misspent arguing whether Big Tech dominance arises from misconduct. That is beside the point. When serious anticompetitive conditions arise in markets providing critical services to the public, regulatory intervention may be needed whether or not those conditions involve misconduct. The U.S. often has regulated markets involving competing networks, such as transportation, media, broadcast, cable and telephone. As in Big Tech, the largest player’s power tends, absent intervention, to snowball quickly into a monopoly.

I argue in my recent book that Congress should adopt a limited regulatory framework opening the markets dominated by Big Tech to more competition. But as Congress has dawdled, another pressing danger has emerged. The tech giants are moving into new markets in which products and services depend on access to their digital platforms. Since their competitors’ products must have access to those platforms—for example, smart home devices need access to Apple and Android mobile platforms—the tech giants can seize an unfair advantage by giving their own products access of better quality or on better terms.

As more products and services depend on digital platforms, the number of markets vulnerable to these tactics rises. Big Tech has made inroads into “smart” homes, automobiles, payment systems and healthcare. The mind boggles at the prospect of the digital aspects of these markets, including mountains of private customer information, being absorbed into the Apple or Google ecosystem.

Congress must act quickly to prohibit the tech giants from unfairly leveraging their dominance into more markets. This doesn’t mean rewriting the antitrust laws but rather taking these three steps:

First, prohibit dominant platforms from giving their own products an unfair advantage by reserving for themselves higher-quality access than they grant competitors. Amazon was charged by the European Union for excluding rival merchants’ products from the “Buy Box”—a valuable space on its website that helps generate sales. Amazon settled the case, agreeing to give competitors’ products the same placement as its own. EU regulators were right and Congress should prohibit a dominant platform from giving preferential platform access to its own products.

This same rule should apply when the platform provides a function through hardware rather than software. Apple has installed a “near field communication” chip in its phones to complete secure short-distance mobile payments with its Apple Pay service, but it excludes other mobile wallet payment services from access to the chip. This discriminatory access relegates competing payment services to lower-quality connectivity. The EU has said it has an eye on the matter.


Second, prohibit Big Tech from using dominant platforms to extract competitors’ business data and exploiting that data in developing competing products. Last month, Amazon settled EU charges that it gleaned nonpublic information from independent merchants using its platform to inform Amazon’s own competing product offerings.

Apple and Google are entering the car-manufacturing business, and that market illustrates why Big Tech’s ability to extract data from competitors should be limited. Drivers should be able to use their cellphones easily in and outside their cars. Car makers can facilitate this by supporting interoperability between the phone and the car. But Apple and Google shouldn’t be allowed to abuse this capacity to gain access to user and vehicle data.

Third, protect consumer privacy. Congress has yet to address the massive amount of personal information these companies already collect. But the scope and scale of these data are about to explode as Big Tech hoovers up information from our homes, cars, financial transactions, healthcare and other markets. This will be augmented, before long, by a 24/7 flow of video, audio and electronic signals collected by their fleets of autonomous vehicles zipping about our streets. Add to this the capacity to sift data with artificial-intelligence tools, and things start resembling the dystopian surveillance societies portrayed in sci-fi movies.

It is past time for Congress to add real bite to its bark and address the harmful effects of Big Tech’s power. This should be at the top of lawmakers’ priorities for 2023.

Mr. Barr is author of the memoir “One Damn Thing After Another.” He served as U.S. attorney general, 1991-93 and 2019-20.

Crafty_Dog

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WSJ: FTC mulls doing something with Amazon
« Reply #17 on: February 04, 2023, 05:51:00 AM »
FTC Prepares Possible Antitrust Suit Against Amazon
Federal Trade Commission considers challenge to array of practices by Amazon, a target of criticism from Chair Lina Khan
By Dana Mattioli and Brent Kendall
Feb. 3, 2023 10:30 am ET



The Federal Trade Commission is preparing a potential antitrust lawsuit against Amazon AMZN -8.43%decrease; red down pointing triangle.com Inc. that in the coming months could challenge an array of the tech giant’s business practices as anticompetitive, according to people familiar with the matter.

The timing of any case remains in flux, some of the people said. The commission also could opt not to proceed, and doesn’t always bring cases even when it is making preparations to do so.

Amazon officials haven’t had individual late-stage meetings with each of the FTC commissioners to make their arguments against a legal challenge, those people said.

The commission in recent years has been examining Amazon practices including whether it favors its own products over competitors’ on its platforms and how it treats outside sellers on Amazon.com, according to some of the people familiar with the matter. The FTC also has been scrutinizing the company’s Amazon Prime subscription service’s bundling practices, some of the people said. Exactly which aspects of the business the FTC would target in a potential Amazon lawsuit couldn’t be learned.


Amazon and the FTC declined to comment. The company has said repeatedly that it competes fairly and that its services benefit both customers and sellers on its platform.

If the commission does sue, it would mark a signature moment in the tenure of FTC Chair Lina Khan, who built her career in part by arguing in a widely read academic paper that Amazon had amassed too much market power and that antitrust law had failed to restrain it.

An FTC case also would be an escalation of efforts by U.S. antitrust enforcers to rein in the nation’s largest technology companies. The commission sued Facebook in 2020, accusing it of buying and freezing out small startups to choke competition. The case remains pending. The Justice Department, which shares antitrust authority, has filed two broad antitrust lawsuits against Alphabet Inc.’s Google, including one last month that targets the company’s ad-tech business.

Facebook-parent Meta Platforms Inc. has rejected the FTC’s assertions and said its acquisitions have been good for competition and good for those who use its products. Google said the Justice Department’s arguments are flawed and that the advertising technology sector is highly competitive.

The FTC began investigating Amazon during the tenure of Republican Chairman Joseph Simons, who ran the agency while Donald Trump was president. In 2019, Mr. Simons and his counterparts at the Justice Department brokered a jurisdictional agreement for federal antitrust investigations of big technology companies. The Justice Department took the reins on Google and Apple Inc. while the FTC took Amazon and Facebook.

Shortly after Ms. Khan was confirmed as FTC chair in 2021, Amazon filed a petition with the commission that argued she should be recused in investigations of the company, in light of her extensive past criticisms of Amazon. The commission hasn’t publicly responded to that petition, though it has rejected similar recusal arguments made by Facebook. A federal judge also ruled against Facebook on the recusal issue.

Amazon, Apple, Google and Meta were the focus of a 16-month congressional antitrust investigation into the competitive behaviors of the tech giants that concluded with a 449-page report in 2020. The House Antitrust Subcommittee’s report, which Ms. Khan worked on as a counsel to the panel, determined that Amazon had “monopoly power” over sellers on its site, bullied retail partners and improperly used seller data to compete with rivals.

In a blog post the day of the congressional report, Amazon warned against “ill-conceived ideas” about regulation that threatened to force changes to its platform that it said would hurt both consumers and small sellers. “All large organizations attract the attention of regulators, and we welcome that scrutiny,” it said. “But large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong.”

The Wall Street Journal in a 2020 article detailed how employees in Amazon’s private brands business have used data about independent sellers on the company’s platform to develop competing products, a practice at odds with the company’s stated policies. The Journal also reported about Amazon’s tactic of leveraging dominance in one business to compel partners to accept terms from another, which rivals said go beyond typical product bundling and tough negotiating in part because the company threatens punitive action on vital services it offers, such as its retail platform.

Amazon at the time said that it prohibited employees from using nonpublic, seller-specific data to determine which products it launched, and that negotiating across its business units was normal practice in business.

The FTC also has been investigating non-antitrust issues related to Amazon, including whether the company might have used misleading practices to sign up subscribers to its Amazon Prime program, and whether it impedes the ability of consumers to cancel their subscriptions.

In August, Amazon complained about the FTC’s probe and accused the FTC of making excessive and unreasonable demands on founder Jeff Bezos and company executives. It asked the FTC to quash civil subpoenas issued to Mr. Bezos and Chief Executive Andy Jassy. The FTC largely rejected the request.

In December, Amazon agreed to settle two European Union antitrust cases related to allegations about its treatment of third-party sellers on its platform.

Amazon, which didn’t pay a fine as part of the settlement, committed to give third-party sellers in the European Union that use Amazon an equal shot at being selected as the default option for the buttons in Amazon’s so-called Buy Box and to qualify for its Prime shipping program. The company also as part of the settlement agreed to abstain from using nonpublic data about sellers on its marketplace to compete against them in the European Union.

Amazon said at the time that it disagreed with several of the EU’s allegations, but engaged in a settlement to preserve its ability to serve customers and businesses in Europe.

Write to Dana Mattioli at dana.mattioli@wsj.com and Brent Kendall at Brent.Kendall@wsj.com

Appeared in the February 4, 2023, print edition as 'FTC Mulls Antitrust Suit With Amazon'.


Crafty_Dog

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FTC Commissioner resigns to protest FTC chairman
« Reply #18 on: February 15, 2023, 03:01:07 PM »
Why I’m Resigning as an FTC Commissioner
Lina Khan’s disregard for the rule of law and due process make it impossible for me to continue serving.
By Christine Wilson
Feb. 14, 2023 12:08 pm ET


Much ink has been spilled about Lina Khan’s attempts to remake federal antitrust law as chairman of the Federal Trade Commission. Less has been said about her disregard for the rule of law and due process and the way senior FTC officials enable her. I have failed repeatedly to persuade Ms. Khan and her enablers to do the right thing, and I refuse to give their endeavor any further hint of legitimacy by remaining. Accordingly, I will soon resign as an FTC commissioner.

Since Ms. Khan’s confirmation in 2021, my staff and I have spent countless hours seeking to uncover her abuses of government power. That task has become increasingly difficult as she has consolidated power within the Office of the Chairman, breaking decades of bipartisan precedent and undermining the commission structure that Congress wrote into law. I have sought to provide transparency and facilitate accountability through speeches and statements, but I face constraints on the information I can disclose—many legitimate, but some manufactured by Ms. Khan and the Democratic majority to avoid embarrassment.

Consider the FTC’s challenge to Meta’s acquisition of Within, a virtual-reality gaming company. Before joining the FTC, Ms. Khan argued that Meta should be blocked from making any future acquisitions and wrote a report on the same issues as a congressional staffer. She would now sit as a purportedly impartial judge and decide whether Meta can acquire Within. Spurning due-process considerations and federal ethics obligations, my Democratic colleagues on the commission affirmed Ms. Khan’s decision not to recuse herself.

I dissented on due-process grounds, which require those sitting in a judicial capacity to avoid even the appearance of unfairness. The law is clear. In one case, a federal appeals court ruled that an FTC chairman who investigated the same company, conduct, lines of business and facts as a committee staffer on Capitol Hill couldn’t then sit as a judge at the FTC and rule on those issues. In two other decisions, appellate courts held that an FTC chairman couldn’t adjudicate a case after making statements suggesting he prejudged its outcome. The statements at issue were far milder than Ms. Khan’s definitive pronouncement that all Meta acquisitions should be blocked. These cases, with their uncannily similar facts, confirm that Ms. Khan’s participation would deny the merging parties their due-process rights.


I also disagreed with my colleagues on federal ethics grounds. To facilitate transparency and accountability, I detailed my concerns in my dissent—but Ms. Khan’s allies ensured the public wouldn’t learn of them. Despite previous disclosures of analogous information, Commissioners Rebecca Slaughter and Alvaro Bedoya imposed heavy redactions on my dissent. Commission opinions commonly use redactions to prevent disclosure of confidential business information, but my opinion contained no such information. The redactions served no purpose but to protect Ms. Khan from embarrassment.

I am not alone in harboring concerns about the honesty and integrity of Ms. Khan and her senior FTC leadership. Hundreds of FTC employees respond annually to the Federal Employee Viewpoint Survey. In 2020, the last year under Trump appointees, 87% of surveyed FTC employees agreed that senior agency officials maintain high standards of honesty and integrity. Today that share stands at 49%.

Many FTC staffers agree with Ms. Khan on antitrust policy, so these survey results don’t necessarily reflect disagreement with her ends. Instead, the data convey the staffers’ discomfort with her means, which involve dishonesty and subterfuge to pursue her agenda. I disagree with Ms. Khan’s policy goals but understand that elections have consequences. My fundamental concern with her leadership of the commission pertains to her willful disregard of congressionally imposed limits on agency jurisdiction, her defiance of legal precedent, and her abuse of power to achieve desired outcomes.

Three additional examples are illustrative. In November 2022, the commission issued an antitrust enforcement policy statement asserting that the FTC could ignore decades of court rulings and condemn essentially any business conduct that three unelected commissioners find distasteful. If conduct can be labeled with a nefarious adjective—“coercive,” “exploitative,” “abusive,” “restrictive”—it may violate the FTC Act of 1914. But the new policy contains no descriptions or definitions of these terms, many of which also lack context in the law. The commission also candidly explained that its analysis under the new policy may depart from prior antitrust precedent, and identified previously lawful conduct as now suspect. In other words, the new policy adopts an “I know it when I see it” approach. But due process demands that the lines between lawful and unlawful conduct be clearly drawn, to guide businesses before they face a lawsuit.

In January 2023, the commission launched a rulemaking that would ban nearly all noncompete clauses in employee contracts, affecting roughly one-fifth of employment contracts in the U.S. This proposed rule defies the Supreme Court’s decision in West Virginia v. EPA (2022), which held that an agency can’t claim “to discover in a long-extant statute an unheralded power representing a transformative expansion in its regulatory authority.”

Under President Biden, FTC leadership has abused the merger review process to impose a tax on all mergers, not only those that hinder competition. Progressives tried but failed to enact a legislative moratorium on mergers in early 2020 and to pass other restrictions since. Ms. Khan now does so by fiat. Abuse of regulatory authority now substitutes for unfulfilled legislative desires.

We all know the simple rule: If you see something, say something. As an antitrust lawyer, I counseled clients to avoid trouble by knowing when to object and how to exit. When my clients attended trade association gatherings, I advised them to leave quickly if discussions with competitors took a wrong turn and raised alarm bells about price fixing or other illegal activity. Make a noisy exit—say, spill a pitcher of water—so that attendees remember that you objected and that you left. Although serving as an FTC commissioner has been the highest honor of my professional career, I must follow my own advice and resign in the face of continuing lawlessness. Consider this my noisy exit.

Mrs. Wilson is a Republican-appointed commissioner at the Federal Trade Commission.


Crafty_Dog

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WSJ Anti-trust law and Amazon
« Reply #20 on: September 27, 2023, 10:07:09 AM »
Amazon’s Own Track Record Undercuts the FTC’s Case
Thin profit margins and growing competition don’t support monopolist charge
By
Dan Gallagher
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Sept. 27, 2023 7:00 am ET





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Amazon is an enticing target for those who claim big tech has gotten too big, even as competition increases. PHOTO: JOHNNY MILANO/BLOOMBERG NEWS
The biggest of the big techs is finally in the government’s crosshairs. But while Amazon AMZN -0.82%decrease; red down pointing triangle may be a huge target, it won’t be an easy one.

The Federal Trade Commission, along with 17 states, sued Amazon on Tuesday, calling the e-commerce giant a monopolist that “has seized control over much of the online retail economy.” It has done this, the government alleges, by locking in sellers who rely on their ability to reach Amazon’s massive customer base but face an ever-rising raft of fees and rule changes by Amazon to remain on the platform.

Amazon customers, meanwhile, have to deal with a “degraded” experience consisting of inflated prices and lower-quality search results, the latter because of Amazon’s ever-growing business of selling advertising on its own site, the suit alleges.

Amazon denied the charges, and investors weren’t terribly alarmed. Its share price already was down 3% Tuesday morning on the market’s big selloff. The stock slipped an additional 1% by the closing bell. The suit itself was hardly a surprise—The Wall Street Journal reported in February that the FTC was preparing a case.

Indeed, it had been widely expected ever since longtime Amazon critic Lina Khan was named chair of the commission in 2021. Amazon has spent much of the time since arguing that Khan should be recused from any investigation of the company given her stated animosity to it.

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That clearly didn’t work, but the government still faces an uphill battle. Its track record hasn’t been great, either: The FTC failed to stop Facebook-parent Meta Platforms from acquiring a virtual-reality company called Within earlier this year after arguing that deal would hurt competition in the still nascent VR space. A far more ambitious attempt to block Microsoft’s pending acquisition of Activision Blizzard also flopped after a federal judge ruled that the FTC failed to make a persuasive case that the deal would substantially lessen competition.

Amazon certainly makes a tempting target, especially for those who claim big tech has gotten too big. The company that started as an online bookseller in the mid-90s now generates more than $538 billion in annual revenue. That is more than any other public company in the world except Walmart, according to data from S&P Global Market Intelligence. It has gotten here by amassing a huge base of buyers and sellers and an equally massive delivery network consisting of its own planes, trucks and nearly 1,300 distribution facilities in the U.S. alone, according to the latest data from logistics consultant MWPVL.

That scale has naturally earned Amazon more than its share of irate customers, sellers and rivals, and some of the company’s actions certainly have been questionable. But Amazon as a monopolist doesn’t square with the fact that the company still accounts for less than a third of total e-commerce sales in the U.S. over the last four quarters, according to the government’s latest retail sales data.

Why the FTC’s Lina Khan Is Taking on Big Tech, Even if It Means Losing
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Why the FTC’s Lina Khan Is Taking on Big Tech, Even if It Means Losing
WSJ breaks down the battles Lina Khan has picked and why she’s willing to lose. Photo illustration: Xingpei Shen
And even that huge distribution footprint doesn’t exactly allow Amazon to just set prices; Amazon commands the lowest operating margins among its big tech peers, and the company’s retail operations have lost money in seven of the last eight quarters. Overbuilding of its fulfillment network actually caused Amazon to burn cash over the last two years.

Competition is also growing of late instead of diminishing. Walmart’s U.S. e-commerce revenue has averaged 39% annual growth over the last four years and is expected to hit nearly $62 billion in the fiscal year ending January, according to consensus estimates from Visible Alpha. Meanwhile, Shopify has more than tripled its revenue over just the past three years precisely by powering e-commerce sales for a variety of large and small merchants looking for an alternative to selling on Amazon.

“Interestingly, we believe the e-commerce market is becoming more competitive,” Citigroup analyst Ronald Josey wrote in a report Tuesday, also noting the sharp rise of e-commerce bargain sellers such as Temu and Shein.

Colin Sebastian of Robert W. Baird noted that the scope of the FTC’s case is narrower than anticipated in that it doesn’t seem to be seeking a breakup. “At best, the FTC could hope for some modest changes to Amazon’s pricing policies, fewer requirements around Prime shipping, and presumably improved search results,” he wrote.

Amazon likely will have to tread more carefully in the future, but it will still be Amazon.

Write to Dan Gallagher at dan.gallagher@wsj.com

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Crafty_Dog

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WSJ: Apple, Roomba, and Pocahontas
« Reply #21 on: January 29, 2024, 06:59:56 PM »
Trump has a very funny riff about Biden wandering around the stage after a speech like a Roomba , , ,

=======
One might say Elizabeth Warren got her robot. The Massachusetts Senator has prodded antitrust regulators to block Amazon’s acquisition of Roomba manufacturer iRobot. On Monday the two companies called off their deal amid opposition from competition regulators. What a coup—for the Chinese.


Progressives opposed Amazon’s $1.7 billion bid for iRobot the moment it was announced in August 2022. They claimed without evidence that Amazon would undermine Roomba rivals selling in the company’s online marketplace and use the smart vacuum to spy on American homes. But they mostly worried that the acquisition would make Amazon more powerful.

It wasn’t a secret that Amazon wanted to hoover up iRobot’s engineering talent. Expanding its use of robotics could make Amazon’s retail operations more efficient and help expand in new markets. But progressives want to stop big tech companies from growing.

“Amazon has fully leveraged its monopoly power and is ‘almost universally recognized’ as the leader in warehouse and fulfillment robotics space,” Ms. Warren and other progressives wrote to Federal Trade Commission Chair Lina Khan in September 2022. The deal “would open up a new market to Amazon’s abuses.”

The FTC around that time began reviewing the deal. In July 2023 the European Commission opened its own investigation, focusing on dubious concerns that Amazon would favor iRobot over rivals. Yet the U.K.’s competition regulators cleared the deal last year and said Amazon wouldn’t have an incentive to undercut Roomba competitors.

European law prohibits tech platforms like Amazon from favoring their own products. Yet European regulators refused to consider possible concessions from Amazon to allay their concerns about “self-preferencing.” So Amazon and iRobot scrapped the deal.

“During our investigation, we have been in close contact with the US Federal Trade Commission,” European Commission Executive Vice-President Margrethe Vestager said Monday. She said its investigation found “Amazon would have had the incentive to foreclose iRobot’s rivals because it would have been economically profitable to do so.”

Europe’s theory of potential harm to competitors wouldn’t fly in U.S. federal court under the consumer welfare standard. Ms. Khan made similar arguments when she sued to block the Microsoft-Activision Blizzard and Meta-Within Unlimited deals. She lost both. Did Ms. Khan suggest that her European friends scuttle Amazon’s acquisition?

Sen. Warren and Ms. Khan have won a pyrrhic victory. iRobot said Monday it is cutting about 31% of its workforce and research and development spending by “offshoring of non-core engineering functions to lower-cost regions.” iRobot said it will also pause “all work related to non-floorcare innovations.”

It’s hard to see who benefits from the deal’s collapse besides Beijing, which aims to dominate robotics and mass-produce humanoid robots by 2025. The iRobot rivals progressives are worried about are Chinese firms.

As Amazon general counsel David Zapolsky noted in a statement, “mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics.”

Regulator opposition to the deal could also chill U.S. investment and innovation more broadly by sending a signal to venture investors that bigger companies won’t be allowed to acquire startups. Acquisitions are one way venture firms earn a return on their early investments, which they can then plow into other startups.

Last Thursday Ms. Khan launched a review of “the investments and partnerships being formed between AI developers and major cloud service providers.” The agency plans to scrutinize investments by Microsoft, Amazon and Google in artificial intelligence startups OpenAI and Anthropic.

The Biden Administration is subsidizing semiconductor and green-energy companies in the name of competing with China, even as antitrust regulators make it harder for U.S. companies to compete. Call it degenerative artificial government intelligence.

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Re: WSJ: Apple, Roomba, and Pocahontas
« Reply #22 on: January 29, 2024, 11:22:23 PM »
Trump has a very funny riff about Biden wandering around the stage after a speech like a Roomba , , ,

=======
One might say Elizabeth Warren got her robot. The Massachusetts Senator has prodded antitrust regulators to block Amazon’s acquisition of Roomba manufacturer iRobot. On Monday the two companies called off their deal amid opposition from competition regulators. What a coup—for the Chinese.
Given Bezos’ “Progressive” bona fides I’m left wondering what the non-gender specific term for “fratricide” is?