Bill Barr's 'Antitrust Crackdown' Of Google Is Going To Be A Weaponized Farce

from the bad-faith-bullocks dept

Back in May we discussed how strange it was that folks would assume that Bill Barr's "antitrust inquiry" into Google would be in good faith, given Barr's history of, well, everything. It's abundantly clear by now that Barr's DOJ has been eager to weaponize antitrust to go after companies Trumpland is politically opposed to (like the legal cannabis sector), while turning a blind eye to every monopolistic whim of his BFFs in the telecom sector. The DOJ's petty lawsuit against California automakers also made it clear there's no real intellectual consistency being applied at the Trump DOJ when it comes to antitrust.

Now reports indicate that Barr has been expediting the DOJ "antitrust inquiry" into Google, in a transparent bid to get his "crackdown of big tech" into the headlines during the election cycle:

"In an unusual move, Mr. Barr placed the investigation under Jeffrey A. Rosen, the deputy attorney general, whose office would not typically oversee an antitrust case. Mr. Barr and Mr. Delrahim also disagreed on how to approach the investigation, and Mr. Barr had told aides that the antitrust division had been asleep at the switch for decades, particularly in scrutinizing the technology industry."

Context here matters. As the net neutrality fracas made abundantly clear, Google has long been the nemesis of the telecom sector, which has been clamoring for greater scrutiny of "big tech" while successfully convincing the Trump administration to neuter pretty much all oversight of telecom monopolies. Barr, a former Verizon lawyer, has eagerly rubber stamped numerous telecom consolidation efforts with less than zero interest in hard data, most notably the job and competition eroding merger between T-Mobile and Sprint.

Despite an ocean of data showing that deal would reduce competition, harm sector pay, kill overall jobs, and result in higher prices, T-Mobile did everything in its power to kiss the Trump administration's ass to gain merger approval. As a result, DOJ antitrust boss Makan Delrahim not only approved the deal without listening to experts, but used his personal phone and email accounts to help lobby the deal to approval. That is what "antitrust enforcement" looks like at Donald Trump and Bill Barr's DOJ. It's just cronyism dressed up as serious adult policy.

Now, apparently, we're to believe that Barr genuinely cares about "big tech" monopolies.

The speed at which Barr is moving to shovel the inquiry into the spotlight for election season fodder has apparently upset many staffers at the DOJ, who say the rush has eroded the integrity of the investigation:

"Many career staff members in the antitrust division, including more than a dozen who were hired during the Trump administration, considered the evidence solid that Google’s search and advertising businesses violated antitrust law. But some told associates that Mr. Barr was forcing them to come up with “half-baked” cases so he could unveil a complaint by Sept. 30, according to three people with knowledge of the discussions.

Some lawyers who felt they needed more time laid out their concerns in the memo and left the case; about 20 lawyers remain on the team."

There are clearly several goals here for Billy Barr.

The first is to get the false "Conservatives are being unfairly targeted" victimization complex in headlines ahead of the election. The second is to gain leverage over companies like Google as they ponder cracking down on Trump disinformation during an election season. The third is to aid telecom giants and folks like Rupert Murdoch that have long coveted Silicon Valley's advertising revenue. None of these motivations have anything to do with a genuine "antitrust inquiry," but we're going to spend the next month or two watching experts and journalists, who should know better, pretend otherwise.

Some economists have pointed out that Barr's quest to use antitrust to police viewpoint diversity not only isn't particularly legally sound, it (like so much in Trumpland) flies in the face of everything Conservatives claimed they believed in over the last thirty years. For example, there was decades of right wing histrionics about the "fairness doctrine" -- a concern that's suddenly and mysteriously absent as Barr attempts to mutilate antitrust to support his quest to police "viewpoint diversity":

Google engages in plenty of dodgy behavior that requires intelligent, adult antitrust and regulatory scrutiny. But Iran Contra cover upper Billy Barr, fresh off endless bouts of sycophancy, obvious falsehoods, and antitrust abuse, is probably the last guy capable of doing so with even a modicum of integrity.

Filed Under: antitrust, cronyism, doj, william barr
Companies: google

The FCC Mysteriously Retreats From Sinclair Cronyism, Potentially Dooming Controversial Merger

from the about-face dept

If you've been paying attention, you've probably noticed that Sinclair Broadcast Group's $3.9 billion merger with Tribune Media has been widely derided as terrible. The company, already under routine fire for content that's more lobotomized pablum than news, hopes to seal a deal that would give it ownership of more than 230 local broadcast stations reaching more than 72% of the nation. Given Sinclair's inflammatory and facts-optional reporting, that's generally seen as a problem for a country where daily discourse is already a raging dumpster fire, and local reporters are already struggling to survive.

For much of the last year the FCC has been going to comical lengths to pave the way for Sinclair's deal. From attacking the law that prohibits any one broadcaster from dominating more than 39% of local broadcast audiences, to restoring obscure bits of discarded regulation (like the UHF discount) simply to let Sinclair bullshit its way under said limit, the FCC has been making it very clear it hoped to rubber stamp the deal. It was so clear, Ajit Pai found himself the subject of a nonpartisan corruption investigation by his own agency into whether he coordinated the effort with Sinclair.

But the obvious cronyism came to an abrupt and strange end Monday morning, when Pai announced that he suddenly developed some reservations about Sinclair's justifications for the deal, and stated he'd be launching an order that would put the merger under additional scrutiny by an administrative law judge:

You have to think the FCC investigation into Pai's behavior here played more than a small role in him suddenly and uncharacteristically caring about factual data. Pai, who has pretty obvious post-FCC political aspirations, must have seen some pretty damning evidence to engage in such a stark reversal from a full year's worth of merger cheer leading. The deal's allies at the agency had previously tried to claim that a long list of rule changes perfectly timed to aid Sinclair (one of which occurred three weeks before the deal was even announced) were all just entirely coincidental.

Sinclair had been pushing hard for the FCC to eliminate the ownership cap entirely (which the FCC isn't legally authorized to do, but showed interest in attempting anyway). But Sinclair had also been engaged in all kinds of gamesmanship to try and sneak in below the line if that gambit failed, including trying to offload some stations to subsidiaries, shell companies and partners to make it look like they were adhering to the law. Reuters obtained a leaked version of the draft order which indicates that even Pai was forced to admit that Sinclair engaged in rampant "deception" to try and railroad the deal through:

"Sinclair’s actions here potentially involve deception” in its application to acquire Tribune and in reference to the divestiture of WGN, a TV station in Chicago, according to Pai’s draft order, not yet public but seen by Reuters.

The draft order said “this question of misconduct does not bear” only on the WGN transaction but on the entire merger application."

In short, it looks like Sinclair was so immeasurably full of shit during their merger sales pitch and various law-dodging shell games that even Ajit Pai couldn't rubber stamp the proposal, which is saying something about the depths Sinclair was likely willing to sink to. It's likely we'll see more details in the wake of a court fight over the FCC's UHF discount move, and the inquiry into Pai's behavior.

Again, if you've watched Pai try and twist the fabric of reality itself to make AT&T and Comcast happy, this is a pretty shocking about face. For much of the last year it seemed clear Pai was blisteringly-eager to rubber stamp the deal with the usual 3-2 partisan agency vote. But an order shoveling merger review toward an administrative hearing is traditionally seen as a death knell for such deals, meaning Sinclair's multi-year bid to lie its way to market domination may have just hit a dead end -- courtesy of the most unlikely of sources.

Filed Under: ajit pai, cronyism, fcc, local news, media ownership, merger
Companies: sinclair

AT&T Stumbles As It Tries To Explain Why It Paid $200K To Cohen's Shady Shell Company

from the dysfunction-junction dept

Stormy Daniels lawyer Michael Avenatti yesterday dropped a bit of a bombshell on DC in the form of this document (pdf), which alleges that Trump lawyer and "fixer" Michael Cohen was engaged in far deeper, shadier financial shenanigans than had so far been reported. Numerous allegations are made in the document, including claims that Cohen may have violated banking laws in setting up and funneling money through a front company by the name of Essential Consultants, including payments made by Columbus Nova, a U.S.-based affiliate of a company controlled by a Russian millionaire, Victor Vekselberg.

But buried within the document also sits allegations that numerous companies were also paying into Cohen's shell company, which had no employees and claimed to have been focused on real estate ventures. Korean Aerospace Industries, Novartis, and AT&T all managed to pay Cohen for ambiguous services, and all have been providing some comically murky explanations as to why they'd be dumping money into a shell company operated by the President's arguably-shady fixer:

"Korean Aerospace Industries confirmed to The Washington Post that it paid $150,000 to Cohen’s company, but spokesman Oh Sung-keon said that it was not aware of its connection to Trump. The company said that it paid Cohen’s firm “to inform reorganization of our internal accounting system.” The company is in contention for a multibillion joint U.S. contract with Lockheed Martin for jet trainers."

Yeah that doesn't sound suspect at all. The documents allege that AT&T also made four $50,000 payments to Cohen's shell LLC from October 2017 to January of this year (though Reuters now says that those payments could have been as high as $600,000). A statement issued to the press by AT&T attempts to claim that the company was simply seeking "insights" into the administration, which by this point had been in office for nearly a year:

"Essential Consulting was one of several firms we engaged in early 2017 to provide insights into understanding the new administration. They did no legal or lobbying work for us, and the contract ended in December 2017."

It's worth noting that while it was nice of AT&T to confirm the validity of many of the documents' claims, the company's rushed public statement not only got the timeframe of the payments wrong, but the name of the company wrong as well.

One of the theories du jour is that AT&T was trying to secure the repeal of net neutrality, the vote for which (December 14) occurred just as the payments were wrapping up. But given that the Trump FCC had already proven itself to be a mindless rubber stamp when it comes to catering to the telecom sector's biggest companies, such additional payments likely weren't necessary to ensure the vote went AT&T's way.

Granted AT&T's also been pressuring the Trump administration to "reform" NAFTA to make it easier on AT&T's telecom ambitions in Mexico. AT&T was also trying to secure the administration's blessing for its $86 billion acquisition of Time Warner. But given the Trump DOJ proceeded to sue to block that deal for anti-competitive reasons (or hey, just good old cronyism), if the payments were to grease the M&A skids AT&T certainly didn't get their money's worth.

The most likely reason is that AT&T, for some idiotic reason, thought paying a shady NYC fixer's dubious front company would help curry general favor with the Trump administration. That's certainly not out of character. AT&T is a company with pretty greasy track record, whether we're talking about the time it turned a blind eye to drug dealers running a directory assistance scam on its own users, the time it was caught helping scammers rip off telecom systems for the hearing impaired, or that time it was caught making bills harder to understand just to help crammers rip off AT&T customers.

Unless there's some legitimate reason for these payments (which seems hard to fathom), this looks like good old American graft exposed to the light. Still, there's a lot of unsolved questions here, and while AT&T's claim that it was just looking for "insight" might work with revolving door regulators like Ajit Pai, it isn't likely to hold up under deeper federal scrutiny.

Filed Under: bribery, corruption, cronyism, michael cohen, payments, payoffs
Companies: at&t, columbus nova, essential consultants, korean areospace industries, novartis

FCC 'Broadband Advisory Panel' Faces Accusations Of Cronyism

from the protect-the-status-quo! dept

Last year we noted how the FCC had been hyping the creation of a new "Broadband Deployment Advisory Panel" purportedly tasked with coming up with solutions to the nation's broadband problem. Unfortunately, reports just as quickly began to circulate that this panel was little more than a who's who of entrenched telecom operators with a vested interest in protecting the status quo. What's more, the panel featured few representatives from the countless towns and cities that have been forced to build their own broadband networks in the wake of telecom sector dysfunction.

One report showed how 28 of the 30 representatives on the panel had some direct financial ties to the telecom sector, though many attempted to obfuscate this connection via their work for industry-funded think tanks.

You'll recall that FCC boss Ajit Pai consistently insists he's breathlessly dedicated to closing the digital divide, despite the fact his policies (like killing net neutrality or protecting business broadband monopolies) will indisputably make the problem worse. Regardless, Pai has spent the last few weeks insisting in speeches like this one (pdf) that his advisory council is the centerpiece of his efforts to close the digital divide:

"...the BDAC’s work is critical to my top policy priority as FCC Chairman—closing the digital divide. I’ve long said that every American who wants to participate in the digital economy should be able to do so. That’s why at my first open meeting as FCC Chairman, I announced the establishment of the BDAC. And since last March, you’ve been hard at work developing recommendations to the FCC about strategies to promote better, faster, and cheaper broadband. Indeed, you’ve been working so hard that it’s going to take you two days, rather than the one typical for advisory committee meetings, to review and finalize many of these recommendations.

And while Pai insists that this council is doing yeoman's work in solving all of the industry's issues, that's not how non-incumbent-industry panel members see it. In fact, San Jose Mayor Sam Liccardo last week resigned from the panel claiming in his resignation letter (pdf) that the panel exists almost exclusively to help prop up the interests of incumbent ISPs (if you've watched the whole net neutrality thing, this surely comes as no surprise):

"It has become abundantly clear that despite the good intentions of several participants, the industry-heavy makeup of BDAC will simply relegate the body to being a vehicle for advancing the interests of the telecommunications industry over those of the public. The apparent goal is to create a set of rules that will provide industry with easy access to publicly-funded infrastructure at taxpayersubsidized rates, without any obligation to provide broadband access to underserved residents."

As we've noted repeatedly, numerous towns and cities are building their own networks after more than a decade of limited competition has resulted in over-priced, under-performing broadband in countless markets nationwide. Often the only option available to these folks if they want quality connectivity in the Comcast era is to either build their own networks, or strike public/private partnerships with the likes of Google Fiber. But we've also noted for years how ISPs have passed protectionist laws in more than 20 states banning towns and cities from doing so, with the full support of the Trump FCC.

Liccardo, one of the only municipal representatives on the panel (quite by intent) goes on to note how the agency has yet to put forth one meaningful solution to truly help bridge the digital divide:

"The chairs of the working groups on which I participated have been very cordial, and collaborative in tone, and I am grateful for that. However, after nine months of deliberation, negotiation, and discussion, we’ve made no progress toward a single proposal that will actually further the goal of equitable broadband deployment. Although we’ve adopted principles that pay lip service to that objective, not a single one of the draft recommendations attempts to meaningfully identify any new or significant resources to promote digital inclusion."

If you truly want to fix the nation's broken broadband (whether high prices, privacy abuses or net neutrality violations), you need to embrace creative new ways to drive more competition to the market. But since entrenched incumbent providers don't want the associated reduction in revenues, the best alternative is the illusion of productivity. And nothing helps foster that illusion more than paying empty lip service to closing the digital divide on one hand, while actively working to keep everything as broken and dysfunctional as possible with the other.

Filed Under: ajit pai, broadband, competition, cronyism, fcc, sam liccardo

NY Times Changes Its Tune On TPP; Highlights Cronyism, Lack Of Transparency As Problems

from the getting-it-right-second-time-around dept

Last fall, many folks who follow these issues were somewhat dismayed by a weird NY Times editorial that appeared to endorse the Trans Pacific Partnership (TPP) agreement, while basically ignoring the many complaints about it. It wasn't exactly a ringing endorsement, but it did clearly support the agreement, concluding with:

A good agreement would lower duties and trade barriers on most products and services, strengthen labor and environmental protections, limit the ability of governments to tilt the playing field in favor of state-owned firms and balance the interests of consumers and creators of intellectual property. Such a deal will not only help individual countries but set an example for global trade talks.

The endorsement resulted in the Times being rightly mocked for endorsing a secretive agreement that the NY Times editorial writers had not seen (indeed, could not see). Apparently, some folks on the editorial staff took at least some of this criticism to heart, and have now released a new editorial that is much more critical of the TPP -- in particular, the process around it.

That is, while the editorial still (rightly, in our opinion) supports the idea of lowering key trade barriers, it finally acknowledges that a lot of what the TPP is doing has little to do with removing trade barriers, and plenty to do with helping corporations push through global regulations that it could not get adopted domestically. Furthermore, it directly takes on the fact that the USTR is ridiculously secretive on the negotiation with everyone except big businesses that have direct access:

The Obama administration has revealed so few details about the negotiations, even to members of Congress and their staffs, that it is impossible to fully analyze the Pacific partnership. Negotiators have argued that it’s impossible to conduct trade talks in public because opponents to the deal would try to derail them.

But the administration’s rationale for secrecy seems to apply only to the public. Big corporations are playing an active role in shaping the American position because they are on industry advisory committees to the United States trade representative, Michael Froman. By contrast, public interest groups have seats on only a handful of committees that negotiators do not consult closely.

That lopsided influence is dangerous, because companies are using trade agreements to get special benefits that they would find much more difficult to get through the standard legislative process. For example, draft chapters from the Pacific agreement that have been leaked in recent months reveal that most countries involved in the talks, except the United States, do not want the agreement to include enforceable environmental standards. Business interests in the United States, which would benefit from weaker rules by placing their operations in countries with lower protections, have aligned themselves with the position of foreign governments. Another chapter, on intellectual property, is said to contain language favorable to the pharmaceutical industry that could make it harder for poor people in countries like Peru to get generic medicines.

The editorial further notes the problematic "corporate sovereignty" provisions that allow companies the ability to sue countries for regulations they dislike, noting how it could be abused by banks to block financial regulations (as an example). It further questions some of the predictions of economic benefits from these agreements.

Towards the end, it notes (as many of us have been pointing out for years) that the Obama administration, and the USTR in particular, only have themselves to blame for this mess:

To a large extent, the administration has only itself to blame. By keeping secret so much information about trade negotiations, which have ceased to be purely about trade matters like tariffs and quotas, the government has made itself a target for criticism. Mr. Obama and Mr. Froman argue that their critics have misunderstood or misrepresented their intentions. But that is precisely why the president should provide answers to the questions people have raised about these agreements. It is time for him to make a strong case for why these new agreements will be good for the American economy and workers.

Of course, considering how many times this has been pointed out, and the USTR's only response is to push out blatant misrepresentations of the truth, it seems unlikely that anything is going to change any time soon.

Filed Under: cronyism, michael froman, ny times, tpp, transparency, ustr