RECENT DEVELOPMENTS

Reining in Big Tech 

• DOJ 1, GOOGLE ZERO. In 2020, former President Trump‘s DOJ sued Google, alleging illegal monopolization of the internet search market, by, among other things, paying companies like Apple billions to appear as the default search engine. Jonathan Kanter’s DOJ just scored the guilty verdict against Google. The trial to determine remedies begins September 6, which could change Google’s business model and determine the future of AI. Check out Tim Wu’s NYT op-ed and Economic Liberties‘ Lee Hepner on the BBC for more on the case’s implications. Meanwhile, the Epic v. Google (another case Google has lost) remedy trial wrapped, with the judge signaling Google should host rival app stores on their platform. The FTC submitted an amicus brief outlining principles to guide remedies. A final decision could come any day. Finally, in their next legal match-up, DOJ’s case against Google for monopolization of the back-end adtech market begins in Virginia federal court on September 9th.

Building Worker Power

• NONCOMPETE LEGAL BATTLE CONTINUES. The FTC’s noncompete ban was scheduled to take effect September 4, but a district judge in the Fifth Circuit set aside the ban, agreeing with business groups that the FTC lacked authority. It is not clear whether the FTC will appeal the ruling. A Florida federal judge also granted a real estate agency’s request to block the rule, but a Pennsylvania federal judge recently sided with the FTC affirming the rule. Meanwhile, many states already ban the agreements and Congressional members continue to highlight noncompetes’ harms. The Senate Banking Subcommittee on Economic Policy hosted a hearing featuring a doctor and fashion designer discussing how noncompetes hindered their careers.

Airlines

• AIRLINE TECH MELTDOWN. On July 19, CrowdStrike, a cybersecurity software company, released a faulty content update for the Microsoft Windows operating system. The outage caused 46,000 flights to be delayed or cancelled worldwide, including thousands of cancellations by Delta—one of the “Big 4” airlines. Microsoft claims Delta refused assistance to manage the botched update, and the DOT has launched an investigation into Delta’s response. The House Transportation & Infrastructure Committee also introduced bipartisan legislation directing the DOT Secretary to require that airlines develop operational resiliency plans to prevent future outages.
  ‍
• FIFTH CIRCUIT STRIKES AGAIN.  This April, DOT finalized a rule to save consumers $500 million from surprise fees appearing at the end of an airline ticket sale. The Fifth Circuit, however, recently sided with the biggest airlines’ lobbying firm, Airlines for America, to pause the rule, at least temporarily. Airlines for America has also pressured the DOT to drop the automatic refund rule Congress codified in the FAA Reauthorization. Regardless, DOT’s fight against junk fees continues— this month they proposed a rule to ban family seating fees. Comments are due October 8.

Improving Health Care

• PBMs ON DEFENSE. PBMs are responsible for a fifth of total healthcare expenditures. But more and more bipartisan lawmakers and enforcers are working to rein them in. The House Oversight Committee grilled executives from the top three PBMs in its third hearing examining the PBM industry. Also, Reps. Auchincloss (D-MA-04) and Harshbarger (R-TN-01) released a bipartisan bill that would prevent PBMs from “spread pricing,” charging health plans like Medicaid more than pharmacy reimbursements, pocketing the difference.

Blocking Mergers

• FUTURE OF SPORTS STREAMING. Disney-owned ESPN, Fox, and Warner Brothers are pursuing a joint venture, Venu, that would consolidate 80% of all nationally broadcasted sports, forcing competitors to negotiate with the JV to access sports licensing rights. Senators Warren (D-MA) and Sanders (D-VT) and Rep. Castro (D-TX-20) urged the DOJ and FCC to review the deal for potential violations of antitrust law and the National Television Ownership rule, limiting entities from reaching more than 39% of all U.S. households. Sports streaming platform, Fubo, has sued for the JV’s  anticompetitive harms. Economic Liberties and Public Knowledge filed an amicus brief urging the court to block the deal. The judge agreed, granting a preliminary injunction, and will determine on September 12 whether to green light a jury trial in February 2025.

Lowering Prices

• ALGORITHMIC RENTAL HIKES. Nationally, rent prices have risen nearly 20% since 2019, but lack of supply is only part of the problem. The DOJ and 8 bipartisan attorneys general are suing Realpage for using nonpublic, competitive data to facilitate landlord price fixing at “every possible opportunity,” harming millions of Americans. The DOJ suit follows the DC AG’s 2023 case against RealPage and 14 of DC’s largest landlords, and a class action lawsuit has been filed against RealPage for driving up rent. The San Francisco city government has banned the use of such algorithmic price-fixing in rental markets, and VP Harris’s economic agenda references Sen. Wyden’s (D-OR) and Welch’s (D-VT) bill similarly aimed at restricting the practice.
  ‌‍
• GROCERY PRICES TAKE CENTER STAGE. Also front and center in the Harris-Walz economic plan were efforts to combat rising grocery prices, specifically a federal ban on price-gouging. Economic Liberties‘ Senior Fellow Zephyr Teachout writes in The Atlantic how such policy is consistent with many existing state laws. The Harris-Walz announcement builds off the FTC’s ongoing efforts to lower prices by blocking the Kroger-Albertson’s merger, with the trial kicking off this week, and investigating grocery prices through the Strike Force initiative. Senators Warren (D-MA) and Casey (D-PA) are also questioning Kroger’s use of personalized pricing. Separately, independent, smaller grocers are calling for a revival of Robinson-Patman Act (RPA) enforcement to ban price discrimination that gives grocery giants an illegal advantage and more pricing power, and the FTC is rumored to be pursuing its first RPA case in 20 years. Economic Liberties released a fact sheet with more background on the law.
  ‍
• FREEDOM FROM LANDLORD Wi-Fi. Landlords receive discounts contracting for bulk billing internet in multi-family units, preventing individual tenants from opting-out and choosing their own service based on lowest price and highest quality. Previously, the FCC voted to ban exclusive contracts for internet access in rental buildings to prevent the monopolization of utilities in units. But landlords are still locking in tenants. Over 30 advocacy organizations, including Economic Liberties and Public Knowledge, are urging the FCC to issue a rule giving tenants the right to opt-out of bulk billing arrangements.

 Private Equity

• VET CLINICS PE CASH COWS? Since 2017, the private equity industry has spent nearly $60 billion rolling up the veterinary sector, including independent clinics and pet insurance companies. For example, JAB Holding, a German PE firm, owns over 1,000 animal hospitals. Consolidation has increased costs of services by $10 billion in the past four years, and quality of care has plummeted. Senators Warren (D-MA) and Blumenthal (D-CT) requested information from JAB about increased prices, worsening care, and labor conditions in their facilities.

ICYMI

• Due to an FTC complaint, Care.com, a gig platform for caregivers, will refund $8.5 million to caregivers who were deceived while looking for jobs and families who sought to cancel their membership.
  ‍
• Nvidia, the biggest manufacturer of AI computing chips, is trying to buy start-up Run:AI for $700 million, a company that optimizes AI computing.
  ‍
• 10 State Attorneys General joined the DOJ and 29 other states in their lawsuit against Live Nation-Ticketmaster.
  ‌‍
• House Energy & Commerce has requested information from the National Telecommunications and Information Administration’s (NTIA) about Verisign‘s monopoly of the .com internet registry, though NTIA has already decided to renew the Verisign contract for another term.
  ‍
• The White House launched a new initiative, “Time is Money,” to crack down on hurdles consumers face to cancel subscriptions and get refunds, building on the FTC’s Click to Cancel proposed rule and DOT’s finalized automatic refunds rule.
  ‍
• The DOJ filed a lawsuit against TikTok alleging the company violated an FTC consent decree and the Children’s Online Privacy Protection Act, after the FTC made a criminal referral.|
  ‍
• Rep. Summer Lee hosted a press event in Pennsylvania with CFPB Director Rohit Chopra to combat junk fees, including her soon to be introduced Honest Act/NO JUNK Act.
  ‍
• The DOJ declined to block the proposed Alaskan Airlines and Hawaiian Airlines merger, now the DOT will decide whether to sue.
  ‍
• Check out the Economic Liberties op-ed in Semiconductor Digest on how Apple’s market dominance harms domestic chips manufacturing.
  ‍
• A judge tossed out a $4.7 billion jury verdict finding the NFL artificially inflated streaming prices of NFL Sunday games.
  ‍
• Mars. Inc., the fourth largest private company known for its candy bars and lesser known for owning 20% of the veterinary clinics, is in talks to buy $30 billion company Kellanova, owner of famous names like Cheez-It and Eggo waffles.

ELECTION WATCH

• Democratic nominee Harris called competition the “lifeblood of our economy” when unveiling her economic plan.
  ‍
• The NYT editorial page has been buzzing with competition coverage. Economic Liberties’  Director of Research Matt Stoller challenged the campaign to continue a populist economic agenda, NYT columnist Michelle Goldberg argued why VP Harris needs the policies Chair Khan has supported, and former National Economic Council adviser, Jen Harris, noted how competition policy is a necessary complement to effective industrial policy.
  ‍
• And last week’s Democratic National Convention, U.S. Commerce Secretary Gina Raimondo highlighted that a potential Harris Administration would “forge an economy with fair competition,” and one that is “free from monopolies.”

BRIEFINGS & EVENTS

• RSVP for a virtual Economic Liberties’ briefing on how regulating Google can save journalism on August 28 from 1:00-2:00 pm ET