antitrust – Techdirt (original) (raw)

Where Open Access Has Failed To Reform Academic Publishing, Perhaps Antitrust Law Will Succeed

from the go-get-'em dept

The open access movement has been trying for over 20 years to promote the widest access to knowledge. Sadly, as numerous Walled Culture posts have chronicled, what should be a matter of social justice has been subverted by clever and cynical moves from the academic publishing industry in order to retain their fabulous profit margins. As a result, the open access movement has failed to deliver cost-free access to academic papers, or to ease the process of sharing knowledge, at least on the scale that it initially aimed for. That makes a completely different approach to tackling the problems of academic publishing, using US antitrust laws, extremely interesting.

The press release from the law firm that filed the lawsuit, Lieff Cabraser Heimann & Bernstein, claims that “publishers conspired to unlawfully appropriate billions of dollars that would otherwise have funded scientific research.” There are three main components to the alleged antitrust activities of the six academic publishers named – Elsevier, Springer Nature, Taylor and Francis, Sage, Wiley, and Wolters Kluwer.

First, the fact that peer review, whereby other academics review their colleagues’ submitted papers, is unpaid work. The lawsuit claims that the six named publishers “coerce scholars into providing their labor for nothing by expressly linking their unpaid labor with their ability to get their manuscripts published in the defendants’ preeminent journals.”

Secondly, the antitrust complaint points out that publishers “agreed not to compete with each other for manuscripts by requiring scholars to submit their manuscripts to only one journal at a time, which substantially reduces competition by removing incentives to review manuscripts promptly and publish meritorious research quickly.” This is known as the Ingelfinger rule. The third component of the complaint, perhaps the most interesting for readers of this blog, is that academic publishers prohibit scholars from freely sharing the scientific advancements described in submitted manuscripts while those manuscripts are under peer review, something that often takes over a year. As the antitrust complaint puts it:

From the moment scholars submit manuscripts for publication, the Publisher Defendants behave as though the scientific advancements set forth in the manuscripts are their property, to be shared only if the Publisher Defendant grants permission. Moreover, when the Publisher Defendants select manuscripts for publication, the Publisher Defendants will often require scholars to sign away all intellectual property rights, in exchange for nothing. The manuscripts then become the actual property of the Publisher Defendants, and the Publisher Defendants charge the maximum the market will bear for access to that scientific knowledge

The lawsuit claims that the actions of the academic publishers are not only illegal under the US Sherman Antitrust Act, but that they have resulted in “perverse market failures that impair the ability of scientists to do their jobs and slow dramatically the pace of scientific progress.” According to the complaint, this has led to a worsening of the peer review crisis, which has seen fewer scholars willing to provide their work for free. More generally, it has “held back science, delaying advances across all fields of research.”

The lawsuit seeks treble damages, together with injunctive and other relief, “including an order to enjoin the defendants from continuing to violate the law by requiring them to dissolve the challenged unlawful agreements.” All-in-all, it’s a clever way of trying to tackle the key problems of academic publishing. Whether it will go anywhere remains to be seen, but it’s good that someone is at least trying something new.

Follow me @glynmoody on Mastodon and on Bluesky. Originally published to Walled Culture.

Filed Under: academic publishing, academics, antitrust, collusion, ingelfinger rule, knowledge sharing
Companies: elsevier, sage, springer nature, taylor & francis, wiley, wolters kluwer

Google Antitrust Remedies: Promoting Competition Without Punishing Users

from the some-ideas-are-better-than-others dept

Considering how to increase competition in the search space without damaging end users is a trickier question than it seems at first. Many of the suggestions that people have tossed out have tended to focus on ideas that are purely punitive to Google, but which would also have negative impacts on users (and even some competitors). As we reach the stage of the antitrust battle where remedies are actually being considered, it’s crucial that we focus on solutions that will truly promote competition and benefit users, not just score political points against Google.

Earlier this year, I was left troubled by the end result of the ruling against Google in the first (of a few) antitrust cases against it. I think the (currently ongoing) case about the company’s practices regarding advertising is a lot stronger. The case that was ruled on this summer, though, was about Google’s massive payments to Apple and Mozilla to have those companies have Google search as the default on Apple devices/Safari and on Firefox.

At the time, we pointed out that it was difficult to think of any remedies that actually helped solve the situation. Both Apple and Mozilla more or less admitted during the trial that users effectively demanded Google search be the default, and any attempt to use other search engines resulted in angry users. If the court demanded Google stop paying the billions of dollars to Apple or the hundreds of millions of dollars to Mozilla, it wouldn’t hurt Google. Indeed, it would seem to help them.

Since both companies admitted that users were demanding Google as the default, little would change there other than Google getting to keep even more money. And Apple and (especially) Mozilla losing a ton of revenue. That didn’t seem very helpful at all.

In the intervening months, I’ve had a few conversations with folks about possible remedies that make sense. The most reasonable suggestion seemed to be DuckDuckGo’s main suggestion: allow other search engines to build off of Google’s search corpus by enabling API access under Fair, Reasonable and Non-Discriminatory (FRAND) grounds.

The best and fastest way to level this playing field is for Google to provide access to its search results via real-time APIs (Application Programming Interfaces) on fair, reasonable, and non-discriminatory (FRAND) terms. That means for any query that could go in a search engine, a competitor would have access to the same search results: everything that Google would serve on their own search results page in response to that query. If Google is forced to license its search results in this manner, this would allow existing search engines and potential market entrants to build on top of Google’s various modules and indexes and offer consumers more competitive and innovative alternatives.

Today, we believe that we already offer a compelling search alternative with more privacy and fewer ads, relative to Google. We’ve also been working for fifteen years to make our search results on par in terms of feature set and quality by combining our own search indexes with those of partners like Apple, Microsoft, TripAdvisor, Wikipedia, and Yelp. However, we know that many consumers still prefer Google’s results due to the benefits of scale discussed above, and this intervention would erase that advantage, instantly making us and others much more competitive.

This remedy would certainly allow for more competition to arise, which has proven difficult today. No one (not even Microsoft’s Bing) really has the reach and comprehensiveness of Google’s index. DuckDuckGo is mostly built on Bing (I know it insists it’s more than that, but in practice, it appears to be mostly Bing — as we discovered when Bing banned Techdirt, and we also disappeared from DDG).

Every attempt to build competing search engines seems to run into the scale problem eventually without access to Google results. Even Kagi, which was briefly a darling among folks looking for a search alternative, apparently makes use of Google’s search tech on the backend. It seems like a pretty reasonable idea to make it so that others can license access to the API and build Google results into alternative search products, as this gets at the actual issues underlying this case.

A few weeks ago, the Justice Department filed its preliminary thoughts on remedies, and there are a wide mix of ideas in there, some crazier than others. A lot of the headlines that filing generated were around big “break up” ideas: spinning off Chrome or Android. These seem preposterous and unlikely. Under antitrust law while breakups (“structural remedies”) are certainly one tool in the toolbox, they are supposed to be related to the violation at hand.

Given that the antitrust problem in this case was about the search payments, and not anything specific to Chrome or Android, it’s difficult to see how such remedies would even be allowed under the law, let alone make sense. Indeed, without Chrome and Android being attached to Google, those products would likely suffer, as both are subsidized by Google, and that would do a lot to harm users. That doesn’t seem like a good result either.

So the proposals from the DOJ that match DDG’s suggestion of API access are much more interesting (and probably better) overall.

Plaintiffs are considering remedies that will offset this advantage and strengthen competition by requiring, among other things, Google to make available, in whole or through an API, (1) the indexes, data, feeds, and models used for Google search, including those used in AI-assisted search features, and (2) Google search results, features, and ads, including the underlying ranking signals, especially on mobile

Again, this seems to actually target the issue. It creates a scenario for increased competition without a corresponding harm to users or to other competitors. Many of the other sections do not.

Also, arguably, the DOJ could have gone even further, conveying on users more ability to designate access to information and data as a way to escape the silo of Google. This is a bigger issue and one that doesn’t get as much attention, but the ability of large companies to lock in users has diminished the ability of competitors to grow and challenge the network effects of existing businesses.

For some users of Google, the fact that it tracks your history is not seen as creepy or privacy invading, but rather a benefit for that user (and yes, this is not true for everyone!). But if the user could retain control over their own search histories and preferences, and allow third party search engines to access it with the user’s permission it would also help users get out of an existing silo.

Just as one example, Google knows a fair bit about what I normally search on and click on. But if I could make use of that history and give DuckDuckGo or Kagi or someone else access to it for the sake of improving their own search results to my queries, that would be potentially useful for competition. And all it’s really doing is saying that the user who generated that history and metadata should have some control over it as well, including separating it from the underlying Google product.

Yes, this would have to be done carefully, to avoid (say) exposing more sensitive data regarding searches to these other companies, but if it was done in a way that was transparent, and which the end user had control over, it could be really valuable.

Not surprisingly, Google is very, very upset about all these potential remedies. It suggests that if they were forced to share such things with others, it would lead to privacy and security risks:

Forcing Google to share your search queries, clicks, and results with competitors risks your privacy and security. It’s widely recognized, including explicitly by the DOJ in its outline, that forcing the sharing of your searches with other companies could create major privacy and security risks. The search queries you share with Google are often sensitive and personal and are protected by Google’s strict security standards; in the hands of a different company without strong security practices, bad actors could access them to identify you and your search history — as we’ve seen before. Additionally, while sharing Google’s search results with others might create a few copycats, it could also decrease incentives for other companies to actually innovate in search.

This very much depends on what information is shared, with whom, and how. I still think that simply giving the user more control over it, rather than just letting companies fight over access, solves some of Google’s stated concerns.

On the whole, the larger structural remedies (spinning off lines of business) don’t seem to target the underlying issue, seem mainly punitive, and won’t do much to help competition or users. But the idea of opening up access to search systems and data, especially if it gives more control to the end user actually seems like a really good way of increasing competition and improving the situations for users.

Google’s statements about security and privacy are still ones worth considering, but there are ways to deal with those issues, mainly by providing more power to the end user, rather than just opening up that info directly to other search engines.

Filed Under: android, antitrust, api, breakups, chrome, competition, data, doj, frand, remedies, search, search history, silos, structural remedies
Companies: duckduckgo, google

Jim Jordan & Elon Musk Suppressed Speech; Don’t Let Them Pretend It’s A Win For Free Speech

from the that's-the-opposite-of-free-speech dept

Up is down, left is right, day is night. And now, to Jim Jordan and Elon Musk, clear, direct government censorship is, apparently, “free speech.”

This isn’t a huge surprise, but on Thursday, the World Federation of Advertising shut down GARM, the Global Alliance for Responsible Media, in response to legal threats from ExTwitter and Rumble, and a bullshit Congressional investigation led by Jim Jordan.

As we have detailed, GARM was setup following the mosque shootings in New Zealand, which was livestreamed. Brand advertisers were accused (arguably unfairly) of profiting off of such things, so they put together this alliance to share information about best practices on social media advertising for brand safety.

GARM was specifically a way for advertisers to set up those best practices, share them with each other, but also to share them with social media sites, to say “hey, this is the kind of trust & safety processes we expect if we’re going to advertise.”

I disagreed with GARM about lots of things, but in a free market, where there is free speech, they should absolutely be allowed to create best practices and to talk with platforms and advertisers and advocate for better trust & safety practices in order for brands to feel safe that their ads won’t show up next to dangerous content.

All of it was entirely voluntary. Advertisers didn’t have to abide by the standards, nor did platforms. This was literally just part of the marketplace of ideas. Some advertisers advocated for efforts to be made to protect their brand safety, and some platforms agreed while others, like Rumble, did not.

All GARM was at its core was advertisers using their own freedom of expression and rights of association to try to put some pressure on platforms to be better stewards, so that advertisers weren’t putting their brands at risk. You can (perhaps reasonably!) argue that they pushed too hard, or some of their requests were unreasonable, but it’s their free speech rights.

As we’ve detailed over the last month, ExTwitter had regularly used GARM’s standards to try to convince advertisers they were “safe” and officially “excitedly” rejoined GARM as a member just last month. A few days later, Jim Jordan’s House Judiciary Committee released a blisteringly stupid and misleading report, falsely claiming that GARM was engaged in antitrust-violating collusion to punish conservative media. None of that was ever true.

However, Elon announced that he would be suing GARM and hoped that criminal charges would be filed against GARM, perhaps not realizing his own organization had rejoined GARM a week earlier and touted that relationship in its effort to attract advertisers. Earlier this week, he carried through on that plan and sued GARM for alleged antitrust violations.

The lawsuit is absolutely ridiculous. It assumes that because GARM, at times, criticized Elon’s handling of trust & safety issues, that was a form of collusion that abused its monopoly position to get advertisers to stop advertising on ExTwitter.

It is one of the most entitled, spoiled brat kind of lawsuits you’ll ever see. Not only does it seem to suggest that not advertising on ExTwitter is an antitrust violation, it assumes that the only reason that advertisers would remove their ads from the site was not due to any actions by the company or Elon_,_ but rather that it must be because GARM organized a boycott (which, notably, none of the evidence shows they did). One thing is quite clear from all this: Elon seems incapable of recognizing that the consequences of his own actions fall on him. He insists it must be everyone else’s fault.

Indeed, the sense of entitlement shines through from those involved in this whole process.

For example, Rumble’s CEO Chris Pavlovski more or less admitted that if you turn him down when he asks companies to advertise, you would now get sued. The sheer, unadulterated entitlement on display here is incredible:

Rumble had sued GARM alongside ExTwitter, using some of the same lawyers that Elon did. When tweeting out the details to prove that these advertisers should be added to his lawsuit, Pavlovski only showed perfectly friendly emails from companies saying “hey, look, advertising on your site won’t be good for our reputation, sorry.”

That’s not illegal. It’s not collusion. It’s the marketplace of ideas saying “hey, we don’t want to associate with you.” But, according to Rumble, that alone deserves a lawsuit.

Anyway, the World Federation of Advertisers has apparently given in to this lawfare from Elon and Jim Jordan and announced on Thursday that they were shutting down GARM because of all of this.

In other words, Elon, Jordan, and others have used the power of the state, both in the form of lawsuits and congressional investigations, to browbeat advertisers into no longer speaking up about ways to keep social media sites safe for their brands.

This is the exact opposite of free speech. It’s literally using the power of the state to shut up companies which were expressing views that Elon and Jordan didn’t like.

And, so, of course, they and their fans are celebrating this state-backed censorship as a “win for free speech.” It’s ridiculously Orwellian.

This is not a “win” for the First Amendment in any way. It is, in every way, the opposite. The House Judiciary Committee, under Jim Jordan, abused the power of the state to shut up companies from talking about which sites they felt were safe for brands or what those sites could do to be better.

And, of course, a bunch of other very foolish people repeated more of this kind of nonsense, including some of MAGA’s favorite journalists, who pretend to support free speech. Ben Shapiro called it an “important win for free speech principles,” which is just disconnected from reality.

Linda Yaccarino claims it proves that “no small group should be able to monopolize what gets monetized.” This makes no sense at all. No small group monopolized anything. They just tried to put in place some basic best practices to protect their brands and no one had to agree with them at all (and many didn’t).

And if Linda or Elon thinks this will magically make advertisers want to come back to ExTwitter, they’re even more delusional than I thought. Who would ever want to advertise on a platform that sued advertisers for leaving?

Filed Under: 1st amendment, advertising, antitrust, best practices, censorship, elon musk, entitlement, free speech, garm, jim jordan
Companies: garm, rumble, twitter, wfa, world federation of advertisers, x

Google Loses Big Antitrust Fight, Which Will Mean What, Exactly?

from the yeah,-but-now-what? dept

What if you found an antitrust violation… and almost all of the remedies wouldn’t actually do much to fix things? That might be the situation we’re in with Google’s antitrust loss this week. It’s not a good situation by any means, but it’s not clear what to do about it either. The DOJ’s historic antitrust win against Google raises a troubling question: what if the cure is almost as bad as the disease?

On Monday, the judge in Google’s big antitrust trial (the first of a few) found that the company had, in fact, violated antitrust laws. The ruling is massive (286 pages), so it took a few days for me to get through it. You can read straightforward coverage of it elsewhere, so I wanted to focus some of my thoughts on what this actually means.

And my general conclusion is… not very much? At best, it’s marginally helpful to Microsoft (one of just three companies that is larger than Google) and marginally harmful to Mozilla. But… not all that helpful at all to people who want there to be more competition and better search.

From the beginning, I thought this was a particularly weak antitrust case (apparently I was wrong!). I also thought that one of the other antitrust cases the company is facing (about advertising tech) was a hell of a lot stronger. So I’m a bit surprised by the conclusion here, but still left perplexed by what actual benefit this outcome has (should it stand).

And, of course, none of it really matters at all right now, because Google will appeal, and the case will go on for another five or so years before anything is decided. And, at that point, it’s possible that we’ll be living in an entirely different world, perhaps one where AI-driven search engines make Google’s position less dominant anyway.

However, let’s take a step back first, and start with a few key points before delving into this ruling in particular.

1. Having more competition is good and having less competition is bad.
2. Google is a tremendously powerful company, known (at times) to abuse that power in unfortunate ways. It’s entirely reasonable (and probably sensible) not to trust the company. There’s a reason why we removed all Google tracking and ads from Techdirt years ago.
3. Things get complex when most people recognize that Google actually has the best search engine. That’s not to say it’s a good search engine. Many people believe it’s gotten a lot worse of late. But if users tend to think it’s the best and get upset at other companies if they present non-Google search results, what do you do? That was the question we asked last fall, and this ruling has not yet answered it.

All of that means that the situation here is uncomfortable. Judge Amit Mehta says that Google has a monopoly in search. He says the agreements it has made with Apple and Mozilla are a form of illegal tying. In these agreements, Google pays both of those companies lots of money to offer up Google search as a default in browsers and operating systems.

But, it’s a weird sort of monopoly in which the main evidence against the monopolist is that it pays billions of dollars to other companies. But, of course, the reasoning in the ruling is that Google pays that to effectively keep the market uncompetitive.

The judge finds that Google’s market share and the barrier to entry for new search engines is strong evidence that it has market power in search. The court found that Google did not have a monopoly in the search ads market, except in search text ads. It appears that Amazon’s product page ads somehow saved Google from also having a monopoly in regular search ads.

After establishing that Google has a monopoly in search and in text ads, it then explores whether or not its behavior is anti-competitive. Again, the Judge flat out says that everyone basically agrees that Google is the better product:

In a sense, Google is not wrong. It has long been the best search engine, particularly on mobile devices… Nor has Google sat still; it has continued to innovate in search…. Google’s partners value its quality, and they continue to select Google as the default because its search engine provides the best bet for monetizing queries…. Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior. … And Google’s rivals have tried to oust it as the default GSE. Microsoft, most notably, has pitched Apple on making Bing the default multiple times, and DDG made a bid to be the default for private browsing mode searches on Safari. … These firms have not succeeded in part due to their inferior quality. …. It is also true that Google foresaw that the future of search was on mobile. Microsoft acknowledges that it was slow to recognize the importance of developing a search product for mobile, and it has been trying to catch up—unsuccessfully—ever since.

The judge even quotes Apple’s Eddy Cue admitting that it wouldn’t be worth it for the degraded user experience, even if Microsoft paid them much more money:

The market reality is that Google is the only real choice as the default GSE. Apple’s Senior Vice President of Services, Eddy Cue, put it succinctly when, in a moment of (perhaps inadvertent) candor, he said: “[T]here’s no price that Microsoft could ever offer [Apple] to” preload Bing. Tr. at 2519:10-11 (Cue) (emphasis added). “No price.” Mozilla stated something similar in a letter to the Department of Justice prior to the filing of this lawsuit. It wrote that switching the Firefox default to a rival search engine “would be a losing proposition” because no competitor could monetize search as effectively as Google.

This again highlights the issue described above. But to the court, it is an argument that there is no real competition.

If “no price” could entice a partner to switch, or if doing so is viewed as a “losing proposition,” Google does not face true market competition in search

But also, that raises the issue of the other oddity mentioned above. If there’s no one else who’s better, then why is Google paying so much to Apple and Mozilla? Microsoft can’t outbid them, so why not pay less?

And here, the judge speculates that the payments disincentivize others from entering the space at all, based in large part on the founder of the defunct search engine Neeva.

That was the key takeaway from the testimony of Neeva’s founder and former Google Senior Vice President of Ads and Commerce, Dr. Ramaswamy. The court found him to be a particularly compelling witness. He put it best. When the court asked why Google pays billions in revenue share when it already has the best search engine, he answered that the payments “provide an incredibly strong incentive for the ecosystem to not do anything”; they “effectively make the ecosystem exceptionally resist[ant] to change”; and their “net effect . . . [is to] basically freeze the ecosystem in place[.]” Tr. at 3796:8–3798:22 (Ramaswamy). No one would ever describe a competitive marketplace in those terms. When the distribution agreements have created an ecosystem that has a “strong incentive” to do “nothing,” is “resist[ant] to change,” and is “basically [frozen] in place,” there is no genuine “competition for the contract” in search. It is illusory.

But all of that seems based on… pure hypotheticals. After all Neeva did enter the market. And failed. But others continue to try (like Kagi). Could Apple have made its own search engine? Maybe? Would it really have done so? Dunno. Would it have been any good? Also don’t know. Microsoft has spent billions on it and hasn’t done all that well. It seems more likely that the attempts by companies to use AI to reinvigorate search will have a better chance, and that’s unrelated to the issue of Google’s agreements.

And so, again, we get to remedies. The court can’t force someone else to create a good search engine that can compete with Google. Nor can it force Apple and Mozilla to default to other search engines when neither seem interested in doing so. About the only obvious move is to present a user choice screen of what search engine they want to use, which many users will see more as a nuisance than anything else. And… Europe already did this, and basically everyone still chose to use Google.

Some people point to reports about similar choice screens for browsers “working” in the EU, but that really depends on how you define “working.” Some reports highlighted how smaller browsers saw a large bump in users, but it still appears negligible relative to the market leaders.

So all of this leaves everyone in an uncomfortable and not very helpful position. Yes, it would be nice if there were other competitors in the market. But what about this ruling will actually make that happen? At best, this seems to give Google an excuse to pay less to Apple and Mozilla, which helps Google out and harms Mozilla, one of the few companies that is actually competing in the browser space.

That doesn’t seem like a good or healthy result.

Some are arguing that this calls for a “breakup” of Google, but it’s also difficult to see. What in breaking up Google enables more successful search engines to hit the market? Again, that kind of remedy seems more reasonable (and more likely to have an impact) in the other case about adtech.

And, again, by the time this case is actually over, years down the road, the entire market may have already shifted. This leaves things in an uncomfortable position. Yes, Google is dominant in the market. And, no, that’s not great. But how do you get someone else to build a really good search engine out of this remains unclear.

So, in the end, I still find this case frustrating. What do you do when the status quo seems way less than ideal, but the remedies presented don’t seem likely to help, and could actually do damage to a competitive player like Mozilla?

It’s also made more problematic by having different antitrust cases targeting different parts of Google’s business. If you could take a more holistic view of the company and its impact on various markets, it seems like the issues, the impact, and the potential remedies would take a more comprehensive view. But, instead, this is what we’re left with.

The DOJ won a historic antitrust case, which might not have any significant impact at all.

Filed Under: amit mehta, antitrust, competition, monopoly, search, tying agreements
Companies: google

It Always Gets Dumber: Elon Sues The Ad Coalition He Just Rejoined Because He Thinks It’s Illegal To Not Advertise On ExTwitter

from the the-hypocrisy-files dept

Remember when Elon told advertisers not to advertise on ExTwitter? Remember how he told them to “go fuck” themselves? Well, now he’s suing those companies for the serious crime (he claims it might be RICO) of not wanting to advertise on his site.

Oh, and it’s even dumber than that. Because, as we detailed, just a month earlier, ExTwitter “excitedly” announced how “proud” it was to rejoin the industry coalition that Elon is now suing. And apparently, they’re staying in as a part of that coalition.

But, wait, let’s back up a bit. There’s so much stupid here that it’s easy to get ahead of ourselves.

GARM is the Global Alliance for Responsible Media. It was set up by the World Federation of Advertisers in response to the horrifying mosque shooting in Christchurch, in which the killer livestreamed the attack. Around this time, the media started pointing out (sometimes fairly, though often not very fairly) that when bad stuff showed up online (terrorism, CSAM, hate) it often showed up next to big brand advertisements.

Advertisers recognized that it would do damage to their brands to keep having ads show up in that way, and they set up GARM as a way in which advertisers and social media companies might try to create some basic frameworks to minimize such a risk for advertisers. It basically creates some standards and best practices for both advertisers and social networks to do with it as they see fit (nothing is required at all).

Next up, Elon announced a plan to purchase Twitter for $44 billion claiming it was to support free speech. Then he immediately regretted it and tried to back out of the deal. When that was clearly going to fail (in spectacularly embarrassing ways), Elon switched gears and said he’d go through with the deal.

Since Elon’s conception of “free speech” from the beginning has basically been “obnoxious speech I like is protected, but speech I dislike is not,” many advertisers decided to hold back on their ad spend to protect their brands. This turned out to be wise for a variety of reasons.

The company would then swing back and forth with CEO-in-name-only Linda Yaccarino wooing advertisers to come back to the platform, only to have Elon do something stupid and push them away again.

Early on in Elon’s tenure, he got into a bit of a war of words with folks associated with GARM after they merely asked him for details of how he would deal with hate speech on the platform. At some point after taking the company over, Elon took Twitter out of GARM. However, whenever the company wanted to cozy up to advertisers, they would tout how they would comply with GARM standards.

Twitter did that in January of 2023 and again in June of 2023.

But, of course, Elon would continually fuck things up. In November of 2023, he did so by going on stage at the Dealbook conference and telling advertisers to “go fuck yourself.” He also told them “don’t advertise.”

It appears many advertisers took him up on the latter offer again (no idea if they took him up on the former offer), making life difficult for the business side in which the company has to try to attract advertisers.

Then, just last month, ExTwitter announced that it had “excitedly” rejoined GARM. Note the date on the tweet (which is still up):

A week later, Rep. Jim Jordan (as he is known to do) released a very stupid, misleading report, claiming that GARM was an antitrust violation and that it was pressuring advertisers not to advertise on conservative media. Elon, who seemed unaware that days earlier his own company had excitedly announced it was rejoining GARM, announced that he would sue GARM and its “collaborators” over their decisions not to advertise on ExTwitter.

So, basically a week after rejoining GARM “excitedly,” “free speech absolutist” Elon announced that he would be suing GARM for using their speech to tell advertisers how best to keep their brands safe, which meant that some of them chose not to advertise on ExTwitter.

And, this week, he went through with it. Even though X is a Nevada company headquartered (for the time being) in California (though with plans to move to Texas) and WFA is a Belgian non-profit with US offices in New York, Elon sued in Texas. And not just any Texas court, but the Northern District of Texas, Wichita Falls Division, where they were guaranteed to get judge Reed O’Connor, who is already hearing Elon’s SLAPP suit against Media Matters (and has already been siding with Elon despite the ridiculousness of the case).

The complaint argues that GARM and its advertising partners are engaging in antitrust behavior in convincing advertisers not to advertise on ExTwitter. But there’s quite strong precedent at the Supreme Court that says that economic boycotts related to lawful expression are protected under the First Amendment. The only cases when that’s not true is if they’re advocating for something illegal (which didn’t happen here) or the boycott is not for any legitimate purpose, but to kill a competitor.

The complaint is nonsense in so many ways, including the false claim that GARM “forces” social media companies to adhere to its standards. But that’s not true. Social media companies can choose to adopt those standards or not (and how). And, at the same time, the advertisers who are members of GARM get to choose whether or not they want to advertise on platforms that don’t adhere to those standards. No one is forced to do anything.

And, remember, Elon literally told advertisers who were concerned about these issues on ExTwitter not to advertise.

The exhibits in the complaint show a bunch of emails that repeatedly (though contrary to how they’re described in the complaint) show that GARM just acts as a facilitation organization, and advertisers all get to make up their own minds on how to deal with things.

I mean, literally in one of the exhibits, an advertiser is asking GARM’s lead, Rob Rakowitz, what to do about Twitter, and Rakowitz tells the advertiser “you may want to connect with Twitter directly to understand their progress on brand safety and make your own decisions.” That email starts out with him telling the advertiser pretty explicitly that GARM doesn’t make recommendations, and that such decisions are “completely within the sphere of each member and subject to their own discretion.”

So, the evidence that ExTwitter itself has submitted debunks the entire argument of the case. In the complaint, ExTwitter tries to play this off as GARM trying to cover its tracks after Jim Jordan had launched his investigation.

But none of this should matter. The entire crux of the case is the ridiculous belief that advertisers have no right to pull their advertisements from Twitter.

In announcing the lawsuit, Linda Yaccarino put out a laughably stupid video in which she (1) wore a necklace that said “free speech” and (2) argued that not advertising on ExTwitter was an attack on free speech (and, hilariously, on ExTwitter’s users). I mean, you can’t make this shit up:

These organizations targeted our company, and you, our users. The evidence and facts are on our side. They conspired to boycott X, which threatens our ability to thrive in the future. That puts your global town square — the one place that you can express yourself freely and openly — at long term risk. People are hurt when the marketplace of ideas is restricted.

I mean, what? Deciding not to give Elon money is somehow an attack on users of ExTwitter? Did anyone with half a brain read this through? The marketplace has rejected your terrible understanding of trust & safety, and advertisers (and users) have gone elsewhere. That’s free speech and the free market in action.

There’s no requirement that anyone advertise on your terrible platform.

And no, ExTwitter is not “the one place that you can express yourself freely and openly.” That’s the wider internet. There are many places that allow people to express themselves freely and openly, while ExTwitter has shown a frequent willingness to remove content that Elon dislikes.

Free speech rights include freedom to not associate with someone, and that’s all advertisers are doing. If the marketplace isn’t accepting of that, then, well, that’s the marketplace telling you your ideas suck.

Meanwhile, Elon continues to argue that this is not just a civil matter, but a criminal one, pretending that this might be a RICO Act violation.

Seems like as good a time as any to point to an archived version of Ken White’s (unfortunately no longer online) lawsplainer on why it’s not RICO, dammit. In this case, it is especially not RICO.

Again, it needs to be clear what’s going on here. Elon Musk told advertisers to go fuck themselves and not advertise. Many of them did so. A few of them reached out to GARM to see what people there thought about advertising on Twitter, but no official recommendations were ever made.

And somehow, that’s RICO? Or an antitrust violation?

Meanwhile, at least one other wannabe company has joined Elon in this stupid, anti-free speech crusade. Rumble, the “what if YouTube, but for assholes,” video streaming company also sued. In the same court. With the same lawyer.

The Rumble lawsuit may be even dumber. The company admits that it doesn’t care about protecting the brand safety of advertisers:

Rumble has chosen not to implement monetization policies that are based on GARM’s preferred brand safety standards. Because of this, Rumble forgoes spending significant resources on brand safety efforts, which allows it to offer advertising space at a lower price than other platforms that do invest resources in complying with restrictive brand safety standards.

It presents no evidence that GARM did anything with regard to Rumble, but just whines that whenever it’s spoken to GARM members, none of them ever decide to advertise.

Rumble has made multiple attempts to form a commercial relationship with GroupM over the years but has never received a meaningful response. In 2023 and 2024 alone, multiple members of Rumble’s sales team sent emails to GroupM seeking to have GroupM purchase advertisements on Rumble’s platform, but GroupM refused to engage with Rumble’s outreach beyond a single meeting that GroupM ended without any follow-up.

On multiple occasions since GARM’s founding, Rumble has opened a dialogue with advertisers and ad tech providers that are GARM members with the intent of selling advertisement inventory to new customers. Despite many productive early conversations, the GARM members eventually declined to purchase advertisements on Rumble.

Must be a conspiracy, huh? And not the fact that Rumble likes to platform terrible people with embarrassingly stupid views, which most brand advertisers don’t want to be within 100 yards of supporting?

The sheer entitlement of these fuckers.

Look, there are a lot of companies that don’t want to advertise with Techdirt. For one, we say things like “these fuckers.” Also, we regularly criticize companies for doing stupid shit. So, I get it. We once had a conversation with a large advertising firm that thought they would get a big telecom company to advertise on Techdirt. They then sent us an example of us trashing that company and said “I’m afraid they won’t be interested.” Fair enough.

I get why companies don’t want to advertise here, and I’m not so entitled to think I’m owed their money or that there’s some conspiracy against us.

But somehow Elon, Linda, and whoever is behind Rumble seem to think the opposite. They think that they are magically owed advertising dollars.

And, really, at this point, any advertiser would have to be absolutely crazy to keep advertising on ExTwitter. Musk and Yaccarino are saying quite clearly that stopping advertising could lead to a lawsuit. Somehow you owe it to keep advertising forever or it’s a criminal attack on ExTwitter’s ability to thrive, which apparently is guaranteed by law.

But, of course, this case might actually succeed, given that it’s in Reed O’Connor’s court, and within the jurisdiction of the Fifth Circuit appeals court. I fear what such a world would look like. It’s certainly not one where free speech is supported, because any such forced association is an attack on free speech. Any such concept that says that certain platforms are magically owed support is not about freedom. It’s about blatant attacks on fundamental freedoms.

Oh, and just as a final kicker, despite Yaccarino claiming that GARM was somehow a threat to all that is good and holy, she told staff today that ExTwitter remains a member of GARM as per their agreement to rejoin last month.

Filed Under: advertising, antitrust, boycotts, brand safety, elon musk, garm, linda yaccarino, rico
Companies: garm, rumble, twitter, wfa, x

Jim Jordan Demands Advertisers Explain Why They Don’t Advertise On MAGA Media Sites

from the free-speech-absolutist-says-what? dept

Remember last month when ExTwitter excitedly “rejoined GARM” (the Global Alliance for Responsible Media, an advertising consortium focused on brand safety)? And then, a week later, after Rep. Jim Jordan released a misleading report about GARM, Elon Musk said he was going to sue GARM and hoped criminal investigations would be opened?

Unsurprisingly, Jordan has now ratcheted things up a notch by sending investigative demands to a long list of top advertisers associated with GARM. The letter effectively accuses these advertisers of antitrust violations for choosing not to advertise on conservative media sites, based on GARM’s recommendations on how to best protect brand safety.

The link there shows all the letters, but we’ll just stick with the first one, to Adidas. The letter doesn’t make any demands specifically about ExTwitter, but does name the GOP’s favorite media sites, and demands to know whether any of these advertisers agreed not to advertise on those properties. In short, this is an elected official demanding to know why a private company chose not to give money to media sites that support that elected official:

Was Adidas Group aware of the coordinated actions taken by GARM toward news outlets and podcasts such as The Joe Rogan Experience, The Daily Wire, Breitbart News, or Fox News, or other conservative media? Does Adidas Group support GARM’s coordinated actions toward these news outlets and podcasts?

Jordan is also demanding all sorts of documents and answers to questions. He is suggesting strongly that GARM’s actions (presenting ways that advertisers might avoid, say, having their brands show up next to neo-Nazi content) were a violation of antitrust law.

This is all nonsense. First of all, choosing not to advertise somewhere is protected by the First Amendment. And there are good fucking reasons not to advertise on media properties most closely associated with nonsense peddling, extremist culture wars, and just general stupidity.

Even more ridiculous is that the letter cites NAACP v. Claiborne Hardware, which is literally the Supreme Court case that establishes that group boycotts are protected speech. It’s the case that says not supporting a business for the purpose of protest, while economic activity, is still protected speech and can’t be regulated by the government (and it’s arguable that what does GARM does is even a boycott at all).

As the Court noted, in holding that organizing a boycott was protected by the First Amendment:

The First Amendment similarly restricts the ability of the State to impose liability on an individual solely because of his association with another.

But, of course, one person who is quite excited is Elon Musk. He quote tweeted (they’re still tweets, right?) the House Judiciary’s announcement of the demands with a popcorn emoji:

So, yeah. Mr. “Free Speech Absolutist,” who claims the Twitter files show unfair attempts by governments to influence speech, now supports the government trying to pressure brands into advertising on certain media properties. It’s funny how the “free speech absolutist” keeps throwing the basic, fundamental principles of free speech out the window the second he doesn’t like the results.

That’s not supporting free speech at all. But, then again, for Elon to support free speech, he’d first have to learn what it means, and he’s shown no inclination of ever doing that.

Filed Under: advertising, antitrust, boycotts, brand safety, elon musk, garm, jim jordan
Companies: adidas, fox news, garm, twitter, x

FTC: Um, That Xbox Game Pass Price Hike Also Contradicts What Microsoft Told The Courts In Activision Blizzard Aquisition

from the liar-liar dept

Late last year, the FTC appealed the decision by the court to allow Microsoft’s acquisition of Activision Blizzard to go through by denying the FTC’s requested injunction against it. Since then, Microsoft appears to be running some sort of experiment to see just how completely it can prove the FTC’s warning about the deal was correct as possible, while also proving just how fully it lied to the courts during those proceedings. It started with a round of post-acquisition layoffs Microsoft conducted, including at the studios it acquired through the deal. During court proceedings, Microsoft indicated that the injunction wasn’t necessary, as the type of vertical acquisition it was pursuing in this case wouldn’t result in layoffs borne of redundancies in the workforce as happens often with other mergers. Then it laid people off due to “areas of overlap” anyway.

Well, Microsoft also told the courts back then that the acquisition would not result in price hikes or other fuckery with Xbox’s Game Pass subscriptions. Recall that regulators throughout the world, including the FTC, made a ton of noise about the cloud-based offerings of Microsoft as part of all of this. Here’s what Microsoft said back then.

“The acquisition would benefit consumers by making Call of Duty available on Microsoft’s Game Pass on the day it is released on console (with no price increase for the service based on the acquisition), on Nintendo, and on other services that allow cloud streaming,” Microsoft writes in the court filing (via TweakTown).

That statement is remarkably clear. No price increases for Game Pass as a result of the acquisition. Well, there must be an immense amount of coincidence then, as Microsoft has just announced changes to Game Pass that include enshittification of existing plans and price raises to boot. And the FTC is pointing out to the court that this is exactly what it warned would happen.

“Microsoft’s price increases and product degradation—combined with Microsoft’s reduced investments in output and product quality via employee layoffs, see FTC’s February 7, 2024, Letter—are the hallmarks of a firm exercising market power post-merger,” the FTC writes. It also points to a statement Microsoft made in its filings during the trial last summer suggesting Game Pass wouldn’t get more expensive just because Activision Blizzard’s games were added to it.

“Microsoft’s post-merger actions thus vindicate the congressional design of preliminarily halting mergers to fully evaluate their likely competitive effects, and judicial skepticism of promises inconsistent with a firm’s economic incentives,” the FTC’s letter concludes. It’s not clear when a final decision in the appeal will be issued, and it’s hard to fathom what the consequences would be if Microsoft ended up losing. It would no doubt be even messier and more confusing than its Game Pass overhaul.

You can read the rest of the letter embedded below, but this is about as good a test case as I could come up with in a lab to see if the courts will allow regulators in America to have any teeth at all. The FTC warned that Microsoft would do exactly as it has done if the acquisition went through. Microsoft said it wouldn’t. The FTC has been proven right and Microsoft has been proven a liar.

For all of that to result in no penalty from the courts is to tell every company in the country that it can flat-out lie to the courts to get an acquisition approved and rest easy knowing the courts won’t un-ring that bell if they succeed.

Filed Under: antitrust, ftc, gamepass, price hikes, xbox
Companies: activision blizzard, micrososft

Just A Reminder: Authoritarians Don’t ACTUALLY Support ‘Antitrust Reform’

from the fascism-is-not-your-friend dept

Thu, Jul 18th 2024 05:34am - Karl Bode

A few years ago you might recall there was a three year news cycle about how the modern Trump GOP was somehow “serious about antitrust reform this time.” The party, which has never met a consolidated monopoly it didn’t adore (see: airlines, telecom, pharma, health, energy), was suddenly getting credited in the press for being a serious player in reining in the worst impulses of corporate power.

In reality, the GOP was seeking leverage against a handful of tech companies to bully them away from moderating right wing political propaganda on social media. Most of the disjointed efforts to actually crack down on corporate power or monopolization were badly crafted and went absolutely nowhere, though tech giants did ultimately scale back disinfo moderation efforts ahead of a pivotal election.

Funny, that.

I feel like we’re at risk of entering another, similar cycle with the selection of J.D. Vance as the Republican nomination for Vice President. Stories are already starting to flow discussing Vance’s bonafides as a very serious antitrust reformer, and somebody very serious about reining in corporate power. Here’s how Reuters frames it, for example:

“Vance is one of several Republican lawmakers, including U.S. Senator Josh Hawley of Missouri and Florida U.S. Representative Matt Gaetz, called “Khanservatives” for their agreement with the FTC chair that U.S. antitrust law has a broader purpose than keeping prices down for consumers.”

If you recall, Josh Hawley was plastered around the media as the poster child of a new era of right wing interest in antitrust reform, buoyed at times in post-leftist circles by folks like Matt Stoller. But Hawley’s interest in antitrust reform proved entirely hollow, because authoritarians and the oligarchs that coddle them only really care about one thing: power and unchecked wealth accumulation.

Democrats and more traditional Republicans also have this fixation, but authoritarianism is a truly next-level affair that holds zero interest in democracy, the rule of law, or the public interest, and holds even less reservation about the indiscriminate use of violence. Bullying corporations to support bigotry-fueled fascism should never be conflated with good faith efforts to rein in corporate power or police monopoly.

This superficial support for antitrust reform is a pseudo-populist effort to win over low information voters that may not be fully versed with the full brutal impact of real-world authoritarianism.

It’s also intended to obscure the real goal: forcing social media giants to take the knee to the interests of authoritarians, for whom a major cornerstone of power is online propaganda and disinformation. Authoritarians that also very much dream of a future where there are no repercussions for widespread criminality, cruelty, and fraud. It’s hard not to miss the impact of those efforts so far.

The U.S. press is often complicit with this con. See here, for example, where Reuters frames Trump, despite everything we know about his corruption, as somebody actually interested in “antitrust reform” (as opposed to a petty tyrant waging a weird and unproductive grievance campaign against largely amoral self-serving corporate giants he has, falsely, misinterpreted as predominantly left wing because they very briefly tried to stop a few racists from being assholes on the internet):

“Scrutiny of Big Tech would not be a departure for Trump. The FTC and Department of Justice under Trump initiated investigations into Meta, Amazon, Apple, Google over alleged antitrust violations. All four companies were eventually sued, and have denied wrongdoing.”

These weren’t investigations as so much as they were performance art designed to bully. And if you hadn’t noticed, they were very ineffective at actually policing consolidated corporate power, but very effective in chasing big companies away from everything from moderating election lies to embracing bare-bones inclusivity initiatives.

Vance will occasionally veer from party orthodoxy to score brownie points with rural constituents (see recent opposition to successful GOP efforts to kill a low income broadband subsidy program). But he’s not going to, say, suddenly support giving the FCC the funding and authority to take aim at Comcast’s clearly harmful telecom monopoly, or start body checking pharmaceutical empires.

When you scratch below the surface on a lot of this stuff you’ll routinely find it’s simply performance.

The primary interests of the Federalist Society and the tech titan VCs payrolling Vance and friends isn’t truly cracking down on monopoly power, or limiting the power of corporations. The primary goal is the almost total lobotomization of what’s left of regulatory power (see: recent Supreme Court rulings), and the dismantling of government efforts to rein in corporate fraud.

Even if Vance isn’t just a stuffed suit authoritarian opportunist speaking out of both sides of his mouth to earn brownie points with rural voters (and I most assuredly think that, like Hawley, that’s the case,) he’s not going to be operating in any sort of political environment that allows him to pursue those interests.

A Trump Presidency means an immediate and abrupt end to the Lina Khan antitrust reform outlets like The Verge and Reuters insist Vance is a big fan of. And make no mistake: backed by a suite of disastrous and corruption-fueled Supreme Court rulings, a second Trump administration is going to absolutely crush what’s left of U.S. corporate accountability and oversight, wreaking complete havoc across consumer protection, public safety, internet policy, and labor and environmental reform.

If you think any of that actually ends well for actual American employees, consumers, and small businesses without seven-figure lobbying budgets and a trust fund, good luck.

Filed Under: antitrust, antitrust reform, authoritarianism, chevron, consumer protection, donald trump, fascism, fcc, ftc, jd vance, lina khan, populism, regulatory

Bumbling Time Warner CEO David Zaslav: What U.S. Media REALLY Needs Is More Mindless Consolidation And Deregulation

from the fail-upward-to-the-level-of-your-incompetency dept

Mon, Jul 15th 2024 05:31am - Karl Bode

By now we’ve well established that the AT&T–>Time Warner–>Discovery series of media mergers were some of the dumbest, most pointless “business” exercises ever conceived.

The utterly senseless saga burned through hundreds of billions in debt, saw more than 50,000 people lose their jobs, killed off numerous popular brands (like Mad Magazine and HBO), created oceans of animosity among creatives, and resulted in a Max streaming service that’s arguably dumber and of notably lower quality than when the entire expensive gambit began.

The brunchlord in charge of much of that dysfunction, Time Warner CEO David Zaslav, has seen absolutely zero accountability for this chaos, and in fact has been broadly rewarded with a series of massive compensation packages that in absolutely no way reflect his competency.

Growth For Growth’s Sake

Last week the media industry announced yet another merger, with Paramount and Skydance the latest to tie the knot. The new company will be overseen by Larry Ellison’s son David, who received a $6 billion gift from dad to make the merger possible. Paramount had struggled with its ingenious strategy of charging higher and higher rates for lower and lower quality services, and eyed a merger as an executive escape hatch.

The Paramount Skydance merger is notably smaller than the Time Warner Discovery mess, but it still represents the media sector’s obsession with mindless consolidation. Consolidation that generally exists to (briefly) boost stock valuations, provide rich men tax cuts, and justify excessive compensation packages for fail-upward brunchlords easily impressed by their own savvy deal making abilities.

The king of those brunchlords, Zaslav, of course was bullish on the merger in comments to Bloomberg, despite companies making it very clear the deal will result in even greater layoffs and cuts. Talking about Paramount and the upcoming Presidential election, Zaslav proudly proclaimed that what the media industry really needs is a President who’ll embrace mindless consolidation and deregulation:

“We just need an opportunity for deregulation, so companies can consolidate and do what we need to to be even better.”

Again, this is a guy who just oversaw one of the most destructive and pointless consolidation efforts in modern media, with a company born from pointless consolidation, feckless antitrust enforcement, and mindless deregulation (AOL Time Warner). Bloomberg, and other major outlets reporting on his comments, apparently didn’t think that was useful historical context.

Media consolidation almost always ends badly for everybody other than executives. The huge debt loads created by such deals are always compensated by massive layoffs, quality control erosion, and higher prices for consumers. The consolidation also steadily drowns out independent and diverse media voices, resulting in a sort of bland homogenization that has very clearly now extended to streaming.

Media Consolidation Matters, And Both Parties Tend To Suck On Media Policy

This is all made possible, in part, by our steady erosion of any sort of media consolidation oversight. Recall the Trump FCC took an absolute hatchet to what’s left of media consolidation rules. And while it did oppose the Time Warner Merger (and failed), it did so as an anticompetitive favor for Rupert Murdoch and a middle finger to CNN, and not out of any legitimate worries about consolidation.

Democrats also have no real media policy, rarely think media oversight is really worth pursuing, and routinely also rubber stamp pointless mergers (like the Time Warner Discovery deal in 2022). They’ll at least occasionally give a nod toward the need for some guardrails, but it’s never a policy arena they’ll pursue with any real zeal, despite consolidation and propaganda’s clear impact on an informed electorate.

I like to play a little game every time there’s a major merger news cycle (whether gaming or media or tech). I like to head to Google News, read the first ten articles on a particular merger, and see how many — if any — can be bothered to point out that these deals almost always wind up harming employees and consumers. And how many can reference any history of empty promises related to past deals, often involving the exact same executives and companies.

There are thousands of academics and experts on media consolidation and merger mania that a reporter could talk to in order to flesh out their stories. There are ample, very recent examples of how these kinds of deals are generally a pointless dumpster fire that exclusively benefit the richest executives. Yet not only are these experts not asked to comment, these issues aren’t raised at all. Anywhere. Even as context.

These are the kind of business reporters who’ll lecture young industry upstarts endlessly about bias and ethics, yet genuinely can’t (or won’t) see how their relentlessly pro-business, pro-mindless deregulation framing of stories is dictated by billionaire ownership and consolidation, and routinely leaves readers painfully (and often intentionally) uninformed about the real-world impact of major business choices.

It gets especially ridiculous when media reports on itself. FOX, CBS/Paramount, ABC/Disney, NBC/Comcast) have all been pushing the FCC to eliminate restrictions and consolidate further in a bid for reduced competition and endless homogenization. Combine it with the rise of a very effective and well funded right wing propaganda ecosystem, and you’ve got yourself a real recipe for “success.”

Filed Under: antitrust, competition, david ellison, david zaslav, diversity, fcc, larry ellison, media, media consolidation, media policy, mergers
Companies: paramount, skydance, warner bros. discovery

NFL Hit With $4.8 billion Verdict In NFL Sunday Ticket Antitrust Case

from the hello-you've-been-ripped-off-for-decades dept

Wed, Jul 10th 2024 03:15pm - Karl Bode

On any given Sunday there’s simply no shortage of U.S. antitrust violations, where some giant predatory corporation leverages its consolidated power to derail price competition and harm consumers.

But because U.S. antitrust enforcement is a feckless and inconsistent mess, in most instances (see: telecom), a company can engage in these kinds of practices for decades and see no meaningful repercussions whatsoever. And most of the time, the government’s rhetoric on antitrust is largely performative (see: the GOP’s recent successful effort to gain political leverage on tech giants).

When companies are occasionally held accountable via regulators and the courts, the targets can sometimes seem scattershot. Take this latest court ruling against the NFL, for example, in which the league has been ordered to pay $4.7 billion in class action penalties over allegations that it artificially drove up the cost of its NFL Sunday ticket out of market streaming service.

The service, historically locked down under one provider (most recently DirecTV/AT&T), has traditionally been prohibitively expensive in comparison to other league streaming services around the world. One reason for that, the class action lawsuit (pdf) alleged, is that the league violated antitrust laws by providing exclusive access to out of market games to a single company (DirecTV).

The NFL had tried to claim that NFL Sunday Ticket was exempted from antitrust protections governing broadcasting, but the class action successfully argued those exemptions only cover over the air broadcasts, not satellite TV or direct to consumer streaming services.

The class action covered 2.4 million residential subscribers and 48,000 businesses in the United States who paid the package between 2011 and 2020. For a while, users who wanted NFL Sunday ticket had to subscribe not just to the package, but to DirecTV as well, resulting in annoyed consumers and lawsuits a decade ago by bars and other businesses complaining they were being ripped off.

The NFL’s deal with DirecTV ended in 2022 after AT&T, imploding and debt-riddled from its pointless and bungled merger with Time Warner, could no longer afford the high price of exclusivity. Google now owns the exclusive, seven-year rights (at a rumored $2 billion every year) to NFL Sunday Ticket starting with the 2023 season.

Damages can technically be tripled under antitrust laws for this lasting ruling, so the NFL could technically be on the hook for as much as $14.39 billion. The league will most certainly file an appeal with the 9th Circuit Court of Appeals and potentially the corporate-friendly right wing Supreme Court.

If the decision holds (and that’s certainly never certain in a corporate-friendly U.S. legal environment) it could potentially force down the price of NFL game streaming access. NBA League Pass and MLB.TV are significantly lower cost, in part because they’re delivered to consumers across a litany of different services (YouTube, Amazon Prime, league-owned apps). But even those options may be expanded:

“It’s going to require other leagues to take a close look at their model and make sure that the means by which they’re providing consumer choice really does ensure true choice,” said Christine Bartholomew, vice dean and professor in the University of Buffalo’s School of Law. “What happened here, at least according to the jury, was that the NFL had really suppressed consumer choice. Not only did they steer the consumers towards using satellite TV, it meant that they had to buy the whole package.”

Class actions are often viewed as utterly worthless lawyer-enrichment efforts, but occasionally they do nudge things in the right direction absent meaningful competition or regulators with working vertebrae.

Filed Under: antitrust, antitrust reform, class action, football, nfl sunday ticket, streaming, video
Companies: nfl