Archive for the ‘Antitrust’ Category
Me, Justice Stevens, and the Dublin Marathon
posted by Spencer Waller
Here is a sentence I never expected to write. So there I was on Monday in the middle of running the Dublin Marathon when I decided to listen on my Ipod to a C-Span podcast interview with Justice Stevens. I had traveled to Dublin to run the actual Dublin marathon and to co-host Antitrust Marathon IV: Marathon with Authority, a round table discussion co-hosted with the British Institute of International and Comparative Law and the Irish Competition Authority.
Around Mile 11, I was hurting and turned from a combination of Irish rock and random songs to some pod casts. After some short New York Times and NPR pod casts, I remembered that I had downloaded a series of C-Span interviews with the current Justices and Sandra Day O’Connor.
I have a special fondness for Justice Stevens. We are both Chicagoans, Cub Fans, and Northwestern Law grads. More improbably, we even had the same antitrust professor (James Rahl) at Northwestern, albeit about 35 years apart. That plus the fact he was primarily an antitrust litigator before going on the bench was enough to get me to devote the next 30 some minutes, and about 3 miles, to the Stevens interview.
A lot of it was a fluffy discussion of his chambers and personal history. But mixed among the fluff and the questions for non-lawyers (What is certiorari?), there were a handful of interesting tidbits. Justice Stevens talked about the reasons and impact of not participating in the cert pool, the importance of writing his own first drafts, and his interest in having the court hear a few more cases than its current docket. There are no smoking guns or shocking revelations, but Justice Stevens does mention the need for Justices from diverse legal backgrounds, such as veterans and litigators, as an important mix for the Court to have on the bench. Justice Stevens is of course both and as far as I know the only current Justice to actually have made his living as a litigator.
The main thing I came away with was the genuine niceness of the good Justice which was my impression from the only time I ever met him. In 1993, I taught in a summer program in Innsbruck, Austria where Justice Stevens was lecturing. Instead of staying for the three days as promised, he stayed and lectured the entire week and interacted warmly with the students and the rest of the faculty. At one point, a student asked him to sign the packet of course materials which he did after class. Because he did not want to play favorites, he then stayed and patiently signed for more than a hundred students.
In the pod cast interview, Stevens demurred on picking a most important or favorite case. But when asked about a most memorable experience, he didn’t hesitate and proudly mentioned throwing out the first pitch at Wrigley Field before a Cubs game at the age of 85.
With that, I grinned, quickened my pace a bit, and headed up the next of an endless series of hills on my way around Dublin on a surprisingly warm and sunny late October day.
I have not listened to the rest of the interviews. But if anyone else has, please post if there are particularly revealing or interesting moments.
October 28, 2009 at 2:15 pm
Tags: Antitrust, baseball, Chicago Cubs, Dublin, John Paul Stevens, marathon, Supreme Court, Wrigley Field
Posted in: Antitrust, Interviews, Supreme Court
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Antitrust in Obamaland
posted by Spencer Waller
Antitrust enforcement was one area where most observers expected significant changes from the Bush years, particularly at the Antitrust Division of the Justice Department. For the past eight years, the Antitrust Division had vigorously prosecuted cartels, but had not been active in monopolization or merger enforcement. In addition to bringing relatively few cases in these areas, the Division had filed a number of amicus briefs in support of defendants, opposed a petition for certiorari sought by its sister agency the Federal Trade Commission, and issued a number of reports and policy recommendations that restricted the reach of the antitrust laws or imposed significant burdens on private plaintiffs. During this same period, the FTC proved to be more active in the competition area, particularly in the health care and intellectual property fields which suggests that the FTC will have a greater continuity in the competition area despite key changes at the Commissioner and staff levels.
The key officials in the Obama administration came into the antitrust agencies promising change. Christine Varney, the new head of the Antitrust Division, gave a speech in her early days promising more vigorous enforcement and hearkening back to the days of Thurman Arnold during the latter half of the New Deal. At the same time, she repudiated a highly restrictive report on monopoly power issued during the waning days of the prior administration issued by the Justice Department alone because a majority of the FTC had refused to endorse. In addition, the Division has reversed policy and filed an amicus brief in support of plaintiffs in a key Supreme Court case involving the pharmaceutical industry. Most recently, the Justice Department and the FTC jointly announced a new initiative to revisit the Merger Guidelines of the 1990s used by both agencies to decide which mergers and acquisitions to challenge on competition grounds. Read the rest of this post »
October 1, 2009 at 12:57 pm
Tags: Antitrust, DOJ, FTC, Live Nation, Obama administration, Ticket Master
Posted in: Antitrust, Consumer Protection Law, Uncategorized
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The Informant!
posted by Michael Kang
It’s not often that I hear about a new Hollywood movie based on the facts of a case that I first encountered while clerking, but The Informant!, directed by Steven Soderbergh and starring Matt Damon, is just such a film. It tells the story of Mark Whitacre, a central actor in a case decided while I was clerking for my judge on the Seventh Circuit. Whitacre served as the key informant in a successful FBI investigation into price-fixing charges against Archer Daniels Midland Co. that sent top executives to prison. As my co-clerk Kevin Metz observed, the case featured the type of direct evidence of an agreement to fix prices that antitrust professors explain is almost never available in antitrust prosecution. Whitacre secretly recorded many hours of conversations with co-conspirators in the lysine industry over three years, all while bragging carelessly to others about his role as an FBI informant and embezzling millions from ADM under the FBI’s nose. During my clerkship year, we worked on a number of memorable cases, but United States v. Andreas probably featured the most colorful facts. Whitacre was a very odd and unpredictable personality who suffered from bipolar disorder, which Matt Damon plays up for comic effect in the movie.
September 11, 2009 at 12:51 pm
Posted in: Antitrust, Criminal Law, Movies & Television
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Google Books and the Limits of Courts
posted by Frank Pasquale
The Google Books litigation has inspired a lot of commentary on the web. As an early October fairness hearing approaches, a consensus appears to be building: the proposed settlement is too important and complex for a court to approve in its current form. Agent Lynn Chu has complained that “No one elected the[] ‘class representatives’ to represent America’s tens of thousands of authors and publishers to convey their digital rights to Google.” Pamela Samuelson, by all accounts one of the leading academics in American intellectual property law, has this to say:
The Google Book Search settlement will be, if approved, the most significant book industry development in the modern era [emphasis added]. . . . The Authors Guild has about 8000 members. OCLC has estimated that there are 22 million authors of books published in the U.S. since 1923 (the year before which books can be presumed to be in the public domain). Jan Constantine, a lawyer for the Authors Guild, is optimistic that authors and publishers of out-of-print books will sign up with the Registry, but there are many reasons to question this.
For one thing, the proposed settlement agreement implicitly estimates that only about 750,000 copyright owners will sign up with the Registry, at least in the near term. Second, many books are “orphans,” that is, books whose rights holders cannot be located by a reasonably diligent search. Third, many easily findable rights holders, particularly academic authors, would much rather make their works available on an open access basis than to sign up with the Registry. Fourth, signing up with the Registry will not be a simple matter, since the Registry won’t just take your word for it that you are the rights holder. You are going to have to prove your ownership claim.
The non-representativeness of the class is one ground on which it is possible to object to the proposed Book Search settlement. Other reasons to object or express concerns will be explored in subsequent articles. Objections must be filed with the court by September 4, 2009.
A suitable platform for hosting public discussions of the deal only launched a few weeks ago, thanks to the diligent efforts of James Grimmelmann (who is also organizing an academic conference on the issue in October). The proposed settlement raises a number of issues, which may only be addressed by extensive regulation of the project — or a public alternative dedicated to serving those marginalized by the current proposal.
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August 11, 2009 at 9:39 am
Posted in: Antitrust, Economic Analysis of Law, Google & Search Engines, Intellectual Property, Law and Inequality, Privacy, Uncategorized
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From Antitrust to Anti-Systemic Risk
posted by Frank Pasquale
The “optimal size and complexity of developing countries’ financial systems” has been hotly debated in the economics community. Writing for the Harvard Business Review & Boston Globe, Duncan Watts focuses on our own dilemmas in a provocative account of complex systems:
[G]lobally interconnected and integrated financial networks just may be too complex to prevent crises like the current one from reoccurring. . . . A 2006 report co-sponsored by the Federal Reserve Bank of New York and the National Academy of Sciences concluded that even defining systemic risk was beyond the scope of any existing economic theory. Actually managing such a thing would be harder still, if only because the number of contingencies that a systemic risk model must anticipate grows exponentially with the connectivity of the system.
So if the complexity of our financial systems exceeds that of even the most sophisticated risk models, how can government regulators hope to manage the problem? There is no simple solution, but one approach is close to what the government already does when it decides that some institutions are “too big to fail,” and therefore must be saved – a strategy that, as we have seen recently, can cost hundreds of billions of taxpayer dollars. . . .
An alternate approach is to deal with the problem before crises emerge. On a routine basis, regulators could review the largest and most connected firms in each industry, and ask themselves essentially the same question that crisis situations already force them to answer: “Would the sudden failure of this company generate intolerable knock-on effects for the wider economy?” If the answer is “yes,” the firm could be required to downsize, or shed business lines in an orderly manner until regulators are satisfied that it no longer poses a serious systemic risk. Correspondingly, proposed mergers and acquisitions could be reviewed for their potential to create an entity that could not then be permitted to fail.
Of course, our system has been headed in precisely the opposite direction, largely thanks to the “best and brightest” now at Treasury and the Fed. As Simon Johnson puts it, we “pay too much deference to the expertise and presumed wisdom of a sector that screwed up massively.”
July 20, 2009 at 8:57 am
Posted in: Antitrust, Corporate Finance, Economic Analysis of Law
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Google Book Search Scrutiny
posted by Frank Pasquale
Writing in Slate, Mark Gimein knocks down a number of straw man arguments against the Google Book search deal. I look forward to seeing how he grapples with more serious concerns, like those raised by James Grimmelmann. I’ve also been impressed by Christopher Suarez’s working paper on the need for antitrust scrutiny of the proposed deal . Suarez proposes a number of sensible settlement modifications that I hope the court will take seriously. It doesn’t have much time to get this right, as the following conference announcement shows:
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July 1, 2009 at 4:29 pm
Posted in: Antitrust, Economic Analysis of Law, Google & Search Engines, Intellectual Property
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Toward a Public Alternative in Digital Archiving and Search
posted by Frank Pasquale
With inimitable clarity, Cory Doctorow made the case for an open alternative to Google in The Guardian earlier this month. He focused on the secrecy of search:
[S]earch engines routinely disappear websites for violating unpublished, invisible rules. Many of these sites are spammers, link-farmers, malware sneezers and other gamers of the system. . . . The stakes for search-engine placement are so high that it’s inevitable that some people will try anything to get the right placement for their products, services, ideas and agendas. Hence the search engine’s prerogative of enforcing the death penalty on sites that undermine the quality of search.
[Nevertheless, i]t’s a terrible idea to vest this much power with one company, even one as fun, user-centered and technologically excellent as Google. It’s too much power for a handful of companies to wield.
Search engines like Google have some good reasons for keeping their algorithms confidential–if they were public, manipulators could quickly swamp Google users with irrelevant results. However, just as Comcast cannot circumvent net neutrality regulation by saying all its traffic management and spam-fighting methods are trade secrets, search engines should not be able to use such arguments to escape regulation altogether. Moreover, there are ways of developing a qualified transparency that would let a trusted third party examine a search engine’s conduct without exposing its business methods for all the world to see.
But Doctorow does not want regulation here–he wants an alternative. Having made a similar case for a “public option” in the case of health insurance, I like this line of argument, but I think Doctorow is underestimating the barriers to entry. Though he’s aware of the failure of Wikia, Doctorow wonders if a “wikipedia for search” could be built:
We can imagine a public, open process to write search engine ranking systems, crawlers and the other minutiae. But can an ad-hoc group of net-heads marshall the server resources to store copies of the entire Internet? . . . . It would require vast resources. But it would have one gigantic advantage over the proprietary search engines: rather than relying on weak “security through obscurity” to fight spammers, creeps and parasites, such a system could exploit the powerful principles of peer review that are the gold standard in all other areas of information security.
The “rival public system” approach has been suggested for search engines a few times before. About a decade ago, Introna & Nissenbaum demonstrated that “the conditions needed for a marketplace to function in a ‘democratic’ and efficient way are simply not met in the case of search engines.” Recognizing this, Jean-Noel Jeanneny made a case for a French language alternative to dominant US-based search engines. The Quaero project in the EU appears to be answering that call, though in a far more dirigiste manner than Doctorow would probably like.
I have a few thoughts on a “public option” in search, building on a talk I gave at Yale Law’s Library 2.0 conference in the spring.
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June 20, 2009 at 7:59 pm
Posted in: Antitrust, Google & Search Engines, Privacy
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An Antitrust Angle on the Public Plan
posted by Frank Pasquale
Is genuine health reform possible? Several recent developments are promising. President Obama’s big Congressional majorities (plus the Specter defection) are reminiscent of the Johnson-era milieu that led to Medicare and Medicaid.* Key interest groups are less “Harry and Louise” and more “try to appease.” Most importantly, the failures of managed care, consumer-directed health care, and other artifacts of the “ownership society” are now self-evident. As unemployment rises, lack of insurance spikes, compounding the misery of many of those unlucky enough to get thrown out of work.
What could derail real health reform? Most likely, fake health care reform, particularly the kind that assumes there is something near a “free market” in operation now. As health care antitrust scholar Thomas Greaney argued yesterday, markets for health care are often very concentrated or riddled with barriers to entry:
The unfortunate fact is that a majority of the country is served by a few dominant insurers. (In 16 states, one insurer accounts for more than 50 percent of private enrollment; in 36 states, three insurers have more than 65 percent of enrollment). Likewise, because of lax antitrust enforcement, most markets are characterized by dominant hospital systems and little competition among high-end physician specialists.
In these circumstances, which economists call ‘bilateral monopoly,” the players often reach an accommodation in which they share the monopoly profits rather than compete vigorously. A prime example is the experience in Massachusetts, where Blue Cross/Blue Shield, the dominant insurer, reached an understanding with the dominant hospital system, Partners Healthcare, that entrenched higher prices for health insurance and hospital care.
Some might hold out hope that the Obama administration’s new emphasis on antitrust enforcement might solve that problem, but I would not hold my breath. After losing seven hospital merger cases in a row, the government is not exactly in a position to go storming into health care markets to demand competition. Only new antitrust laws are likely to accomplish much in that direction, and even if they were by some miracle adopted this year, I can’t imagine them having much effect within any reasonable time frame.
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May 13, 2009 at 9:54 am
Posted in: Antitrust, Health Law
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The Googlization of Advertising
posted by Danielle Citron
Search engines are indispensable to the quest for helpful information in our data saturated age. Although custom search engines attract small audiences, the big three—Google, Yahoo, and Microsoft—run the lion share of online searches, with Google performing 62% of U.S. Internet searches and with Yahoo next in line running 17.5% of searches. Not surprisingly, Google attracts a disproportionate share of online advertisers, the main source of revenue for search companies. The recent joint venture advertising agreement between Google and Yahoo heralds the further concentration of online advertising in the search market from three to two hands by allowing Google to sell search ads that display next to Yahoo search results.
This Sunday, the Association of National Advertisers announced its opposition to the Google-Yahoo deal on the grounds that the partnership would “diminish competition, increase concentration of market power, limit choices currently available and raise prices to advertisers.” Frank Pasquale presented spirited and compelling testimony on this issue before the House Judiciary Committee’s Task Force on Competition Policy and Antitrust Laws this summer. (I attended the hearing and highly recommend viewing the C-SPAN recording—see here). As Pasquale brought alive at the hearing, the joint venture agreement would cement Google’s dominance over the online advertising market. Benjamin Edelman of Harvard Business School explains that such excessive market share allows Google to control the ads generally available (and unavailable) to consumers. For instance, in August 2004, Google banned an ad critical of President Bush, but, of course, consumers did not know what they were missing. Worth serious consideration is Pasquale’s concern that the opacity of Google’s practices enables it to conceal any abuse of its soon-to-be overwhelming power in the online advertising market.
September 9, 2008 at 5:01 pm
Posted in: Antitrust, Google & Search Engines
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If You Read One Article on Antitrust This Year. . .
posted by Frank Pasquale
make it Maurice Stucke’s Better Competition Advocacy, 82 St. John’s L. Rev. 951 (2008). In this work, he convincingly argues that “The goals of antitrust law enforcement are subsumed by, but not necessarily co-extensive with, the goals of competition policy.” Stucke’s article not only extends an impressive line of work on competition law, but also offers some insights on the dangers of over-specialization for legal scholars generally. I’ll offer some excerpts now, and try to apply the piece to some current controversies later this week.
Stucke addresses four main questions in his article:
Prevailing competition advocacy glosses over four fundamental questions: First, what is competition? Second, what are the goals of a competition policy? Third, how does one achieve, if one can, the objectives of such desired competition? Fourth, how does one know if the economy is progressing toward these goals?
Stucke argues that conventional competition policy based on the work of the Chicago School answers all these questions in narrow and unsatisfying ways.
July 13, 2008 at 8:59 pm
Posted in: Antitrust
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WALL*E and the Theory of the Firm
posted by Nate Oman
Over the weekend my son and I saw WALL*E, Pixar’s new story about the adventures of a robot living on a post-environmental apocalypse Earth in which the land has been entirely covered by mountains of trash. As it turns out, more than 700 years before humanity had ditched the planet under the leadership of BnL Corp., the super-retailer that seems to have taken over the world, replacing not only the government but all other economic actors. Despite the apparently heavy-handed plot that I just summarized, WALL*E is a delightful movie, and the obvious jabs at Wall*Mart and other big-box retailers are delivered with such charm and — oddly given the post-apocalyptic setting — understatement that some-time Wall*Mart apologist that I am, I found myself carried effortlessly along by the story. That said, the vision of a world ruled by BnL Corp. got me thinking about the implicit theory of the firm underlying Pixar’s dystopia.
Firms, of course, are an embarrassment to economic theory. If the market is so good at coordinating the production of goods and services, why would you even see firms, which exist as islands of central planning in a sea of unplanned spontaneous order? Since Coase’s ground breaking article in the 1930s, the answer has been “transaction costs.” The central planning of the firm necessarily imposes costs given the informational constraints that managers necessarily labor under. On the other hand, so long as those costs are less than the cost of coordinating the same activity through spot contracts in the market, the firm is more efficient than the alternatives. So what gives with BnL Corp.? Why would one firm get so big as to engulf all others? Here are some thoughts.
July 7, 2008 at 9:12 am
Posted in: Antitrust, Contract Law & Beyond, Corporate Law, Culture
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Three on Antitrust
posted by Frank Pasquale
D. Daniel Sokol has been blogging up a storm at the Antitrust & Competition Policy Blog. I thought I’d highlight a few things I’d seen there, plus some other sources.
1) The ABA Antitrust Source is out, with a preview of the upcoming Supreme Court term.
2) You can catch the Kirkpatrick Antitrust Conference (on Conservative Economic Influence on U.S. Antitrust Policy) on a webcast that Georgetown is generously providing. (It can also be downloaded via iTunes.)
For a taste of the proceedings, check out my colleague Marina Lao’s careful critique of the Supreme Court’s 5-4 decision in Leegin. It will be featured in a forthcoming book, Where the Chicago School Overshot The Mark: Effect of Conservative Economic Analysis on U.S. Antitrust (ed. Robert Pitofsky, Oxford Univ. Press).
3) And for some humor, check out a Rockefeller’s attack on antitrust, reviewed here by Seth Bloom (Senior Counsel on the staff of the Senate Antitrust Subcommittee).
December 26, 2007 at 6:50 am
Posted in: Antitrust
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Global Trends To Mitigate Local Special Interests: India and Antitrust
posted by Deven Desai
India has a booming economy and although China gets much of the press regarding new economic power, India is usually mentioned as right behind. Indeed, James Wolfensohn, former head of the world bank, has specifically argued that India and China will return to commanding a large portion of the world’s GDP. Thus when India recently tried to change or update its merger laws, the idea was to improve the law so it would keep pace with the potential for economic growth. The law as intended and the law as passed, however, seem to be quite different. The Deal reports that “The new law requires companies with as little as $126 million of assets in India, even if they are only subsidiary operations, to notify officials there of any acquisition from around the globe. Reporting the merger plans and waiting 210 days before completing the deal would be required even if the target is not located in India and doesn’t do any business there.” As such the ABA and several other attorney groups have contacted the Indian government to urge it to change the law which they see as a anticompetitive.
It is entirely possible that the law was not only went “in a different direction during the give and take in Parliament” but reflects some real concerns any developing country will have about corporate law. Those concerns are not clear in the article and should be taken seriously. But taken at face value this situation offers a view of a potential way to see how government may take advantage of international law or at least how global trade can influence the voices in a debate. In one scenario an administration may bow to local interests and protectionist impulses. It may then engage in international deals or even treaties. When the two conflict, the international treaty may demand that the local laws are harmonized and the previous law could change (There are of course many steps and debates to be had over the conflcits between international and domestic law. Still, intellectual property law offers an example of possibly using international norms to achieve one interest group’s (i.e. the copyright industry’s) objectives). This process is not necessarily laudable as the local interests may be undercut and the democratic aspect of lawmaking comes into question. Nonetheless, it is a way the process may proceed.
Alternatively, it seems that the outside voices may provide more information and perspectives regarding the true ramifications of certain laws. If so, the advantage would be that the government may move slower and have too many compromises based on internal pressures, but international groups indicating how they view the law at least ensures that the government has a better sense of the impact of the law at both the domestic and international levels.
image credit: Indian School of Business from WikiCommons
December 6, 2007 at 3:23 pm
Posted in: Antitrust, Corporate Law, International & Comparative Law, Politics
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Can Antitrust Accommodate Privacy Concerns?
posted by Frank Pasquale
The proposed Google/DoubleClick merger has provoked a complaint from EPIC and concern from many privacy advocates. EPIC claims that Google’s standard M.O. amounts to a “deceptive trade practice:”
Upon arriving at the Google homepage, a Google user is not informed of Google’s data collection practices until he or she clicks through four links. Most users will not reach this page. . . . Google collects user search terms in connection with his or her IP address without adequate notice to the user. Therefore, Google’s representations concerning its data retention practices were, and are, deceptive practices.
One key question raised by the proposed merger is whether privacy concerns like these can be folded into traditional antitrust analysis. Peter Swire argues that they can; he believes that “privacy harms reduce consumer welfare [and] lead to a reduction in the quality of a good or service.” I am broadly sympathetic with Swire’s aims, but I worry that contemporary antitrust doctrine is too etiolated to encompass his concerns.
October 23, 2007 at 11:00 am
Posted in: Antitrust, Culture, Cyberlaw, Economic Analysis of Law, First Amendment, Google & Search Engines, Intellectual Property, Philosophy of Social Science, Privacy, Technology
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Questionable Advice On Net Neutrality
posted by Frank Pasquale
The DOJ Antitrust Division’s just-released public comment on net neutrality (available here) has been getting a lot of press. Unfortunately, it appears that the shoddy analysis that Jack Goldsmith saw in the DOJ’s torture memos may also be infecting its approach to net neutrality. I just want to raise three worries apparent on a quick read of the document:
1) Pollyanna Prevails: The DOJ document presumes that a laissez-faire approach has done wonders for US broadband access. But just as visitors from Japan and Europe find our cell phones crippled, so too our internet access is lagging. As the WaPo notes, “In sharp contrast to the Bush administration over the same time period, regulators [in Japan] compelled big phone companies to open up wires to upstart Internet providers”–and saw extraordinary results. But (again, on a quick read), I did not see a single reference in the DOJ document on how other countries handle the policy issues the FCC is facing, except for the Canadian Telus dispute (which it called “irrelevant”).
2) Shunning the Scholars: From a quick text-search of the document’s footnotes, it appears that DOJ fails to reckon with the work of a single one of the following prominent pro-net-neutrality scholars: van Schewick, Economides, Frischmann & Waller, Crawford, or Wu.
van Schewick’s work provides an interesting contrast to many of the citations in the DOJ filing:
Barbara van Schewick [argues that there is a] severe threat of discrimination without network neutrality regulation, and that discrimination will reduce application-level innovation. van Schewick’s work is not funded by any of the special interests involved in this issue — nor is it sponsored by the “independent” think tanks that are funded by the special interests involved in this issue.
Even more surprisingly, the DOJ fails to cite the leading legal academic voice against net neutrality, Christopher Yoo.
3) Errant Economism: Economic analysis has its place, and DOJ does cite several economists who claim that network neutrality rules would “skew investment, delay innovation, and diminish consumer welfare.” Even if I were to cede that very questionable claim, is that the end of the issue? Economic analysis is one tool among many for evaluating the normative desirability of a policy proposal. Would the DOJ think FCC Commissioner Deborah Taylor Tate out of line for being concerned about sex and violence as she helps craft these rules? A narrow focus on economics does not help us achieve what the DOJ itself admits is the clear “public policy objective here. . . .: a thriving and dynamic Internet capable of meeting the demands of consumers for fast and reliable access to a rich variety of content and applications.”
September 6, 2007 at 10:35 pm
Posted in: Antitrust, Culture, Economic Analysis of Law, Google & Search Engines, Law and Inequality, Politics, Privacy
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Pomegranate Juice and the War on Terror
posted by Dave Hoffman
The blogs are abuzz this morning talking about the Times’ profile of Stephen Abraham, an Army reserve officer who filed a crucial affidavit in the latest Guantanamo litigation. The article explains Abraham’s unique role:
As an intelligence officer responsible for running the central computer depository of evidence for the hearings, he said, he saw many of the documents in hundreds of the 558 cases. He also worked as a liaison with intelligence agencies and served on one three-member hearing panel.All of which has left Colonel Abraham, 46, a civilian business lawyer who has lately been busy with a lawsuit between makers of pomegranate juice, with a central role in the public debate over Guantánamo. His account has been widely discussed in Congress, the administration and the press. On Friday, a federal appeals court judge took note of it in describing what she said were problems with the Pentagon’s hearing process.
I thought I’d do some digging into that aspect of this story that will interest our non-constitutional readers: why are pomegranate juice sellers suing each other?
PACER searches disposed of the mystery quickly. POM Wonderful LLC v. Purely Juice, Inc. et al., CV 07-2633 (C.D. Ca.) was filed on April 20, 2007. POM lawsuit against Purely Juice alleges that Purely Juice violated the federal Lanham Act (and its state analogue) by falsely marketing its product as “all natural, consist[ing] of 100% pomegranate juice” with “NO added sugar or sweeteners.”
Abraham represents Purely Juice. Just a few days ago, his client won an important victory in the case. On July 11, 2007, Judge Christina Snyder denied POM’s TRO. The order itself (download the PDF here) is notable for its length and careful attention to the law. POM had independently tested Purely Juice’s product, and allegedly found that “it is clear that consumers of ‘Purely Juice . . .’ are not receiving the nutrients and antioxidant polyphenol health benefits that one would expect from 100% authentic pomegranate juice.” [Editorial comment: anytime you are asking a judge to make a claim about “antioxidant polyphenol health benefits” on a TRO, you seem likely to be in for a tough fight.] But, Abraham argued that, basically, the FDA hasn’t yet made clear what constitutes 100% pomegranate juice, and it was otherwise compliant with 21 CFR 101.30, regulating percent juice claims. The Court agreed with Abraham. As for the plaintiff’s claim that the “NO added sugar” was misleading, the Court found that there was insufficient evidence to find that defendant had added sugar, accepting Abraham’s defense that “the laboratory results could have been caused by the natural variation in the pomegranate fruit, growing conditions, harvesting, storage conditions or processing conditions.” (Notably, this seems like a non-denial denial to me.)
Abraham’s good lawyering saved his client a significant chunk of change. According to a declaration filed in the case, Purely Juice has 800,000 bottles in its inventory, each of which retails for $3.79. ($3.79! For juice!)
So what’s the moral here? You can be a busy commercial lawyer and a participant in the great issues of constitutional moment at the same time? Or, perhaps, as various players seek to control the last lucrative, non-commodity, juice market, the great Pomegranate Wars have begun.
July 23, 2007 at 1:41 pm
Posted in: Antitrust, Civil Rights, Constitutional Law, Consumer Protection Law, Current Events, Food
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Can Lawyers Afford Not to Play the Rankings Game?
posted by Frank Pasquale
In an article in National Jurist, rankings expert Brian Leiter was quoted as saying that “The more info and the more competing measures there are out there, the less concerned law schools will be about pleasing their U.S. News master.” In a different setting, I too have been enamored of a diversity of rankings. I’ve also hoped that law schools would more formally recognize, say, their top 10% of brief-writers, researchers, or oral advocates, elevating the visibility of those with exceptional skills in areas outside of exam-taking.
However, Leigh Jones reports that there are some costs associated with a diversity of rankings:
By some estimates, law firms have about 200 chances each year to participate in rankings, awards programs or so-called “league table” publications that they hope will distinguish them from the competition. Not only are firms finding their marketing resources stretched thin by the onslaught, but they also say it is getting tougher to wade through the rubbish. “Not a day goes by that I don’t come across another one from someone I’ve just never heard of,” said Lloyd Pearson at White & Case.
Pearson is the “communications manager at the 1,907-attorney firm,” and “was brought aboard last year to handle the flood of surveys, questionnaires, phone calls and research related to awards and rankings that the firm pursues each year.” What happens to firms who can’t hire someone to manage the information overload?
Unfortunately, avoiding the rat race may not be much of an option. As law schools learned to their chagrin, an “echo chamber” effect can cause early ratings to become self-reinforcing. This dynamic sheds new light on lawsuits against websites that purport to rank or score lawyers. Plaintiffs may rightly worry that a low initial rating will become a self-fulfilling prophecy, handicapping their chances at getting good cases and thereby pushing them further down the pecking order.
Hat Tip: Eric Goldman.
July 8, 2007 at 7:04 pm
Posted in: Antitrust, Intellectual Property, Law Practice, Law School (Rankings)
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RIAA’s Turn to Be a Defendant
posted by Frank Pasquale
Matthew Sag has convincingly argued that RIAA’s litigation war against downloaders is rational for the industry: it’s basically self-financing, as just about every defendant is too terrified of massive statutory damages to put up a fight. But the record industry’s declining fortunes may make its court victories Pyrrhic.
Moreover, a scorched earth litigation strategy against infringers is getting less viable as a few defendants fight back. For example, one litigant has found a creative way of subjecting RIAA’s tactics to public scrutiny:
Former RIAA defendant Tanya Andersen is now suing the major record labels and the RIAA for negligent and illegal investigation and prosecution. In a thirteen count civil suit filed in Oregon District Court, she alleges that record labels didn’t use properly licensed investigators and violated her privacy.
I’m still waiting for someone to bring the antitrust lawsuit that was forestalled by Bertelsmann’s purchase of Napster a few years ago. As Napster-slaying Judge Patel said of the RIAA’s distribution strategy then, “These ventures look bad, smell bad and sound bad” from an antitrust perspective.
Of course, given the lassitude of federal authorities, the antitrust case will be hard to make. But I look forward to more privacy challenges. As Sonia Katyal has argued,
recent developments in copyright law. . . have invited intellectual property owners to create extrajudicial systems of monitoring and enforcement that detect, deter, and control acts of consumer infringement. As a result, . . . intellectual property rights have been fundamentally altered—from a defensive shield into an offensively oriented type of weapon that can be used by intellectual property creators to record the activities of their consumers, and also to enforce particular standards of use and expression. . . .
If agencies fail to police these tactics, perhaps only individuals can fight for themselves. But as Bruce Scheier asks, why doesn’t the US have a privacy commissioner?
Hat Tip: BoingBoing.
June 26, 2007 at 10:59 pm
Posted in: Anonymity, Antitrust, Intellectual Property, Law and Inequality, Legal Theory, Media Law, Politics, Privacy, Privacy (Consumer Privacy), Privacy (Electronic Surveillance)
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International Readers’ Survey: Antitrust
posted by Frank Pasquale
Daniel Sokol has asked me to link to his post surveying which countries teach antitrust in law school (or equivalent educational institutions). Please comment there if you have information on the topic.
June 17, 2007 at 7:04 pm
Posted in: Antitrust
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Google, Google on the Wall. . .
posted by Frank Pasquale
Troubled and don’t know what to do with your life? Ask a search engine!:
Eric Schmidt, Google’s chief executive, said gathering more personal data was a key way for Google to expand. . . . “The algorithms will get better and we will get better at personalisation. The goal is to enable Google users to be able to ask the question such as ‘What shall I do tomorrow?’ and ‘What job shall I take?’ ”
Guidance counselors may well go the way of the Maytag Repairman. It reminds me of a recent WSJ article on family “naming strategies” to assure Google-able children:
Attempting to counteract her own anonymity on the Web, Ms. Wilson now goes by “Abigail L. Garvey Wilson” when she publishes scientific papers. And recently she has been running names through search engines in anticipation of the arrival of her second child, a daughter due at the end of this month.
If search engines become the key filter through which we see the world, why not? But it is a little worrisome that they are taking on such importance as the search marketplace gets increasingly concentrated. Consider this piece from the WSJ on Microsoft’s acquisition of aQuantive:
The deal . . . follows recent acquisitions of Web-ad companies by Google Inc., Yahoo Inc. and traditional advertising agencies. The emerging consensus: The online-ad market is maturing around an oligopoly of huge companies that sell and place the ads users see online. Placing those ads is increasingly seen as the business model that will fund almost everything on the Internet — from search portals, news sites and video downloads to Web-based software services such as word processing. (emphasis added)
As far back as 2000, researchers predicted that “some search engines may dominate the search engine market.” Admittedly, I have to plead guilty here to contributing to a self-fulfilling prophecy–the more that idea is pushed, the less likely it is that investors will fund potential rivals. But I think it important we realize its implications as search engines take on an ever more important cultural role. Just as Habermas has argued for state support for a quality press to provide alternatives to market outlets, I hope some government or foundation funds a viable open-source and open-access alternative to commercial search portals funded by ads.
May 24, 2007 at 2:35 pm
Posted in: Antitrust, Google & Search Engines, Intellectual Property, Philosophy of Social Science
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