Nevada’s antitrust deal sheds light on Elizabeth Warren’s big plan

T-Mobile and Sprint, the #3 and #4 wireless carriers, would like to combine so as to more effectively compete with Verizon and AT&T, the two dominant players in the cellular service market. Various states went to court against the merger, arguing (dubiously) that the combination would harm consumers and drive up prices. And now, via Reuters, this:

Also on Monday, Nevada said it would withdraw from the lawsuit in exchange for early deployment of the next generation of wireless in the state, creation of 450 jobs for six years and a $30 million donation to be distributed by Nevada Attorney General Aaron Ford and aimed at helping women and minorities, Ford’s office said.

How blatant can you get? The best touch, of course, is the $30 million fund with which to ingratiate lucky beneficiaries around the state. (“The recipients of these grants for the use of the charitable contribution will be at the discretion of Nevada’s attorney general” — that is, the same AG Ford who filed and settled the state’s case, and from whose press release is excerpted that sentence.) It looks a lot like the familiar cozytown set-up in many cities in which permission to build a large development or win a public contract just might call for a hefty donation to a local nonprofit with ties to the mayor and council.

Notwithstanding the best efforts from some quarters to develop per se rules in hopes of generating clear and predictable legal outcomes, antitrust law remains a world of subjective interpretation in which government office-holders are left with great discretion regarding how and against whom to wield enforcement power. Whether you want to call it logrolling or use a less flattering term like “extortion,” the temptation is to trade off antitrust leniency for some of the other sorts of favors business might be able to render government actors.

All of which brings us to presidential candidate Elizabeth Warren’s and other candidates’ new proposals for antitrust, which a CNBC headline accurately reports (as to Warren’s) “would dramatically enhance government control over the biggest U.S. companies.” In particular, the proposals would invite the government far more deeply into oversight of business practices, including refusal to share “essential” facilities with competitors, pricing goods below the cost of production, and much more, as well as mergers and acquisitions.

It’s hard to know whether Sen. Warren sees all this new arbitrary discretion as a bug, or a feature, in her enormous plan. Either way, an accumulation of power that tempting will sooner or later attract appointees seeking either a political whip hand over the U.S. corporate sector, a source of payouts like that in Nevada, or both. [cross-posted from Cato at Liberty]

Feds: lawyer made $1 million from bogus ADA claims in New York and Florida

Feds arrested Florida attorney Stuart Finkelstein on charges of mail fraud, aggravated identity theft, false declarations to a court, and obstruction of justice following a scheme in which they say he filed more than 300 lawsuits on behalf of two purported clients who had attempted to visit public establishments but were frustrated by lack of Americans with Disabilities Act (ADA) compliance. In reality, prosecutors say, the two individuals “neither retained nor authorized Finkelstein to file ADA lawsuits on their behalf” and “never attempted to visit” the public establishments. The lawyer allegedly “made numerous false representations” both to the businesses and to the courts, “obstructed official judicial proceedings, and then settled these fake lawsuits in order to collect approximately $930,000 in attorney’s fees.” The suits were filed in New York and Florida. [U.S. Department of Justice press release; Jay Weaver, Miami Herald]

Religion and the law roundup

New York: adoption ministry must comply or close

New York bans the operation of adoption agencies that will not serve customers of all sexual and gender orientations and conditions of wedlock, whether or not such agencies receive any public funds or contracts. New Hope Family Services, a ministry that works with expectant mothers to place their newborns, has agreed to stop accepting new clients and now the question is whether it can go on servicing pending and completed placements. New York state is arguing no, but a Second Circuit panel of Judges José Cabranes, Reena Raggi, and Edward Korman has granted a preliminary injunction pending consideration of the agency’s First Amendment claims: “the strong public interest pertaining to adoption services, i.e., the welfare of children, both those already adopted and those awaiting adoption, is best served by granting rather than denying the requested injunction.” [ruling in New Hope Family Services v. Poole; Emma Folts/Daily Orange, Julie McMahon/Syracuse.com, Nicole Russell, Washington Examiner quoting me; my related WSJ piece on recent Western District of Michigan decision]

Antitrust, taxes, and the decline of old Hollywood

The Paramount consent decrees with the U.S. Department of Justice in and after 1948 helped spell an end to the old motion picture studio system, as the Hollywood giants could no longer own theaters to exhibit their films or use block-booking practices to ensure distribution of less popular output. Now, seventy years later, the decrees may at last be on their way out. “Today, as a resurgent left, sometimes joined by the populist right, demands a return to punitive taxes and blunderbuss enforcement of U.S. antitrust laws, the Hollywood experience offers a timely reminder of how economic crusaders can destroy what they don’t understand. By hampering creativity and increasing risk, ill-informed antitrust action can ultimately harm the consumers it is supposed to protect.” [Virginia Posstrel, Yahoo/Bloomberg; background, Ted Johnson/Deadline and Alex Weprin/Hollywood Reporter; related last year]

Wage and hour roundup

  • “Bernie Sanders and Bad Justifications for Minimum Wage Hikes” [Cato Daily Podcast with Ryan Bourne and Caleb Brown]
  • Oregon senator wants to give CEOs a pay incentive to automate, contract out, or otherwise eliminate low-compensation jobs faster than they would otherwise [Hans Bader]
  • “Mayor Pete Wants To Destroy the Gig Economy in Order To Save It” [Nick Gillespie on Buttigieg plan to limit independent contractor status] More on California independent contractor battles [Federalist Society podcast with Bruce Sarchet, earlier here, etc.]
  • Not many states do this: “New York State Passes Bill Allowing Employees to Place a Lien on Employer’s Property For Accusation of Wage Violations” [Employers Association Forum]
  • With hand-made tortillas no longer economic, the Upper West Side restaurant began going downhill [Jennifer Gould Keil, New York Post]
  • The myth of stagnant real wages [Scott Sumner]

Hospital alarms, going off around the clock

“Maria Cvach, an alarm expert and director of policy management and integration for Johns Hopkins Health System, found that on one step-down unit (a level below intensive care) in the hospital in 2006, an average of 350 alarms went off per patient per day—from the cardiac monitor alone….

“Bed alarms have proliferated since 2008 when the Centers for Medicare and Medicaid Services declared hospital falls should ‘never’ happen and stopped paying for injuries related to those falls. After that policy change, the odds of nurses using a bed alarm increased 2.3 times, according to a study led by Dr. Ronald Shorr, director of the Geriatric Research, Education and Clinical Center at the Malcom Randall Veterans Affairs Medical Center in Gainesville, Fla. The alarms have become a standard feature in new hospital beds.” Meanwhile, in 2017 the same federal agency “began discouraging their widespread use in nursing homes, arguing that audible bed or chair alarms may be considered a ‘restraint’ if the resident ‘is afraid to move to avoid setting off the alarm.'” [Melissa Bailey, Kaiser Health News via Virginia Postrel; earlier here, here, and here]

German court: search engines must deindex reports of 1981 double murder

In case you were wondering exactly where the supposed “right to be forgotten” leads in Internet regulation:

A convicted murderer in Germany has the right to get all mention of his crime deleted from internet search results under the EU’s “right to be forgotten” provision, Germany’s highest court has ruled.

Let’s hope the United States never decides to follow Europe’s path by restricting speech rights in the name of personal data erasure. [Bill Bostock, Business Insider]

December 4 roundup

Great moments in media concentration law

This is just absurd: to comply with federal regulations barring owners of daily newspapers from also owning local broadcast stations, the owner of the venerable Dayton Daily News in Ohio may knock it down to three-times-a-week publication so that it won’t count as a daily anymore. Keith J. Kelly of the New York Post spotted the story, Cox Media Group outlined the plan in a press release a few weeks ago, and Joshua Benton at Nieman Lab has more:

To increase the quality of local journalism in Ohio, the Federal Communications Commission is requiring three newspapers to stop printing daily….

Did you get that? To strengthen the local news ecosystem in Dayton, the government is making its biggest newspaper publish less.

The rules date back to 1975 when the Federal Communications Commission (FCC) adopted regulations barring cross-ownership of local broadcast and newspaper properties while grandfathering in existing arrangements. It was never a good rule, but progressive social critics then as now traced countless social ills to media concentration and for-profit ownership of the press (what’s new these days is that populist conservatives crusade against the corporate media too).

Don’t blame today’s FCC. Two years ago the agency voted to scrap the decades-old newspaper/broadcast cross-ownership rules, recognizing that the local news market had gone through convulsive changes in the meantime, with new media sources cutting deeply into ad revenues and the economics of newspaper publishing taking one deep hit after another. (Local broadcasting economics has suffered too, even if not as badly.) But opponents sued, and in September a Third Circuit panel struck down the deregulatory effort, a move that immediately called into question the terms of a pending deal transferring partial control of the large Cox Media Group, which got its start long ago with the venerable Dayton paper.

Others, such as Jonathan Rauch, have pointed out that antitrust laws may need easing anyway if newspapers are to organize successful ways to finance journalism in the online economy. And as we’ve warned before, there are special dangers in unleashing antitrust law on the media sector, where it can leave government with a corrupting influence over whether opposition papers are profitable and who gets to own them. But does anyone really think Dayton residents are better off if their local newspaper stops publishing every day?

[cross-posted from Cato at Liberty]