The blood-boiling excesses of woke corporations can and should be curbed. But there’s no need to destroy the American free-market system in the bargain.
AEP President, Robert H. Bork, Jr., shares in the National Review how conservatives are being trapped into antitrust although their focus should be on Section 230. This puts the Consumer Welfare in jeopardy and lawmakers cannot let that happen.
Our President, Robert H. Bork, Jr., discussed on Fox Business' Larry Kudlow on how Joe Biden is neglecting the consumer welfare and how Biden's new competition policy is a power grab that will hurt our economic growth and investment.
Where's the Consumer Welfare? Our President, Robert H. Bork, Jr., writes how Joe Biden's new competition policy is a power grab that will hurt our economic growth and investment.
AEP's President, Robert H. Bork, Jr.:
What’s been needed all along is a way to protect conservative speech on social media without resorting to a punitive antitrust regime that would put all business under the thumb of Lina Khan and her ilk.
Jim Jordan and House Republicans responded this week with legislation that consolidates antitrust enforcement in the Department of Justice, where professional lawyers follow the law.
House Republicans would fix the content cancellation crisis by updating Section 230, which would require more of the social media companies in exchange for their liability protections. Facebook, Twitter, Google and other companies would have to be more transparent and precise about their content policies. They would have to adhere to objective standards and announce their reasoning in public for a given cancellation. And conservatives and other silenced groups would have a cause of action in court.
I haven’t read the details of this legislation yet, so I can’t speak to any possible long-term unintended consequences. But this general approach is the right one. I hope Republicans in the Senate are listening.
Sen. Lee: Promises Ambiguity During Fragile Economic RecoverY
Lina Khan’s announcement that the Federal Trade Commission will vote within days to rescind a 2015 policy statement upholding the agency’s commitment to the Consumer Welfare Standard is as about as surprising as a wolf suddenly devouring a lamb. Who knew they did that?
With opposition from only two Republican commissions, the stripping of this standard –under which the United States has prospered for almost half-a-century – should be almost pro forma. Scratch the “almost.” Chair Khan is allowing public comment, but only after the vote is held.
It will then be up to courts to act as the bulwark that upholds the position of the Consumer Welfare Standard in antitrust law.
Commissioner Noah Phillips tweeted that this and other items on Khan’s ambitious agenda will “reduce clarity in law, limit public understanding of rulemaking, and remove commission oversight of decisions that impose substantial costs on the agency and businesses alike.”
Republican Sen. Mike Lee said, “Should the FTC rescind the statement, it will replace clarity with ambiguity in the midst of a fragile economic recovery. Rescinding the statement would also signal that the commission rejects the idea that there are any limits to its power or regulatory reach.”
Sen. Lee notes that the 2015 policy statement occurred under the Obama Administration, and that the Biden Administration would do well to focus on a bipartisan approach to antitrust.
My take is that there is no room for bipartisanship in antitrust for the foreseeable future. Conservative anger over Big Tech content decisions are best considered in adjustments to Section 230 that would require more transparency and an appeals process.
Tim Wu Proves the Peter Principle “Authoritarian Proposals in the Language of ‘Freedom’ and ‘Openness’”
Elizabeth Nolan Brown has an insightful piece in Reason on Tim Wu, the “neo-Brandesian,” “big is bad” antitrust theorist now in a senior policy position in the Biden White House.
Brown notes that Wu had warned of a dystopian hell that would descend upon the world if his net-neutrality policies were not enacted. Wu would have, he wrote in Slate, explicitly rejected lower consumer prices as a goal. He would have given all internet players equal bandwidth, “potentially making the user experience at highly trafficked sites poorer – while consumers across the board must pay more, possibly placing the digital reach world out of reach for some.”
Failure to embrace his scheme, Wu said, would mean the internet as we know it would cease to exist. Flash forward to 2021: It still exists.
“In many professional arenas, such a swing and a miss would have consequences,” Brown writes. “At the very least, it might make people think twice before trusting your sky-is-falling predictions again. In Wu’s case, it landed him an advisory role in the Biden Administration.”
She catalogs Wu’s hyperbole and errors from his writing. He says that there are “no longer hundreds of stores that everyone” goes to “but one everything store,” meaning Amazon. This ignores the multitude of stores on and offline, including the world’s largest retailer, Walmart.
His policy proposals are equally at odds with reality. Wu wants, she writes, “the Federal Trade Commission to automatically investigate companies—even those suspected of doing nothing wrong—if they have been a market leader for 10 years or more.”
Brown asks: “What incentive would U.S. companies have to innovate or build long-term relationships with customers if after 10 years of success, the government is guaranteed to intervene?”
She quotes a critic who notes that while Wu worries about the supposed power of private actors, he is complacent about the fact that only the State has a monopoly on force in society and can thus penalize and imprison people. All that matters for Wu is to put the government in firm control.
“All of this, he asserts, would somehow ‘free the political process’ and protect democracy, economic security, and human flourishing. It’s a signature move for Wu, who often couches authoritarian proposals in the language of openness and freedom.”
Lawrence Summers: Khan’s Antitrust Approach “the Way to American Failure ”Stick with Policies that Best Benefit Consumers
Former Treasury Secretary Lawrence Summers tells Bloomberg that FTC Chair Lina Khan’s approach to antitrust “is the way to American failure.” Watch Summers at the 3:25 mark or read his comments below:
I’m halfway with the critics. A new economy needs new thinking and new approaches. The old concepts weren’t designed with issues like platform companies in mind. But I part company completely with the legal scholars who frankly in many cases are not very familiar with economic reasoning in its intricacy. The people who call themselves neo-Brandesians and want to go back to what Justice Brandeis said in 1916.
Ultimately, an efficient economy that serves consumers well is the right criteria for antitrust policy.
Any attempt to change the goal of antitrust policy to be protecting competitors rather than protecting competition, I believe will do grave damage to the American economy.
So yes, we need new approaches, possibly new laws, but they need to be ultimately grounded in an economic approach that is based on having a more functional and efficient economy and [not] the idea that big is bad per se, or the idea that big should be broken up just so that smaller companies have a better chance to compete even when they are less efficient. You read the traditional antitrust decisions of the 1960s and they are a horror show in terms of their economic illiteracy, where companies make efforts to defend themselves by saying that they are inefficient therefore they are not going to win out over competitors in competition …
That is the way to American failure.
Charles Gasparino recently made the case in the New York Post that the Biden Administration is assembling the most extreme team of antitrust regulators ever. He focuses on Lina Khan and her surprise elevation to the chair of the Federal Trade Commission, a move that showed great disrespect to the Senate and surprised even Chuck Schumer.
D.C. Attorney General Karl Racine who, despite his relatively short history with antitrust issues, now seems a likely candidate to assume leadership of the Department of Justice’s antitrust division. Gary Gensler, the first openly antibusiness chairman of the Securities and Exchange Commission, is part of this mix. I would add to the mix Tim Wu, hipster antitrust scholar, now in a powerful position to coordinate all this antitrust carnage policy from the White House.
The views held by Khan and Racine are extreme in the antitrust world, to say the least. Worse, their views are formed without the sort of real-world experience and experiential know-how that comes with service that normally qualifies one for a leadership position in government.
Racine, for example, became D.C.’s first independently elected attorney general by campaigning on social and juvenile justice issues. As Gasparino puts it, Racine switched lanes and recently “sued Amazon over alleged antitrust violations, seeking among other remedies so-called ‘structural relief,’ which is a legalistic way of saying he wants to break up one of America’s most successful companies.”
Gasparino similarly lays bare the thin qualifications of Khan and how her rapid elevation is based more on style than on substance. He goes on to point out how her popular reputation as the “antitrust hipster” and the progressive praise of her article “Amazon’s Antitrust Paradox” catapulted her to a level that is unthinkable for most recent law school graduates. But Gasparino, makes it clear that it is her views on antitrust and not her age that causes him to worry about Khan.
Gasparino writes: “Her paper argued that it does not matter if consumers love to use Amazon because it’s a cheap and efficient retailer selling anything from movies to hand cleanser. Its evil resides in its size; as the dominant online retailer, independent retailers need to have access to the platform. It collects data from consumers and these businesses to further its power as an economic monster. Because of its size, it can cut prices and take market share from any business that dares to challenge its business model. Amazon, she believes, is the modern equivalent of those greedy robber barons of the late 19th century.”
It is easy to forget what a novel take this is on antitrust, one that upends half a century of consistent and beneficial enforcement under the Consumer Welfare Standard. But such radicalism is canon in the Biden Administration. Gasparino points out how important companies like Amazon have been during the pandemic and how such a shortsighted and flawed view of antitrust could endanger our economic recovery just at the final moment of victory over covid.
We must also remember that the Biden Administration is not alone in its desire to rewrite the rules of antitrust regulation. A House committee this week moved on six bills aimed at a level of regulation of tech companies that amounts to government ownership. These bills would create so many new enforcement tools and resources that Big Tech would have to ask permission to Washington for every move. Now wonder Jim Jordan called it “a marriage of Big Government and Big Tech.”
At some point, I would add, regulation becomes ownership.
A federal judge granted Facebook’s request to dismiss the massive antitrust suit filed by the Federal Trade Commission and 46 states, led by New York Attorney General Letitia James. The judge’s reasoning is instructive, beginning with recognition of how fleeting a market advantage is in technology.
“At the time of the last great antitrust battle in our courthouse — between the United States and Microsoft — Mark Zuckerberg was still in high school,” writes Judge James E. Boasberg of the U.S. District Court of the District of Columbia. “Only after his arrival at Harvard did he launch ‘The Facebook’ from his dorm room. Nearly twenty years later, both federal and state regulators contend, in two separate actions before this Court, that Facebook is now the one violating the antitrust laws.”
Boasberg noted that FTC and the states alleged that Facebook has long had a monopoly in the market for what they call “Personal Social Networking Services.” The suit claimed Facebook maintained that monopoly in violation of Section 2 of the Sherman Act by acquiring Instagram and WhatsApp it believed were well positioned to erode its market position. The FTC and states also saw harm in Facebook policies that prevented interoperability between Facebook and certain other apps that it saw as possible competitors.
Judge Boasberg then neatly slices a judicial samurai sword through these contentions.
“The FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims — namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Services,” he writes. “The Complaint contains nothing on that score save the naked allegation that the company has had and still has a dominant share of th[at] market (in excess of 60%).
“Such an unsupported assertion might (barely) suffice in a Section 2 case involving a more traditional goods market, in which the Court could reasonably infer that market share was measured by revenue, units sold, or some other typical metric. But this case involves no ordinary or intuitive market. Rather, PSN services are free to use, and the exact metes and bounds of what even constitutes a PSN service — i.e., which features of a company’s mobile app or website are included in that definition and which are excluded — are hardly crystal clear.
“In this unusual context, the FTC’s inability to offer any indication of the metric(s) or method(s) it used to calculate Facebook’s market share renders its vague ‘60%-plus’ assertion too speculative and conclusory to go forward.
“[E]ven if the FTC had sufficiently pleaded market power, its challenge to Facebook’s policy of refusing interoperability permissions with competing apps fails to state a claim for injunctive relief,” Judge Boasberg writes. “[T]here is nothing unlawful about having such a policy in general.” He also dings the government for acting on a “long-past conduct” with the WhatsApp and Instagram two presidencies ago.
What I find most interesting about his decision are the pains Judge Boasberg takes to note that social media platforms like Facebook are free – and that defining their market boundaries are far from “crystal clear.”
Hardly the stuff of Standard Oil or U.S. Steel.
Reasonable people would relax. This will only intensify the many unreasonable antitrust bills that would amount to a government takeover of American business.