Pluralistic: 10 Nov 2022 Amazon and Apple have an illegal price-fixing conspiracy

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An old-timey cash register displaying $999.99. Its makers' mark has been replaced with Apple's 'Think Different' wordmark; one of the decorative arrows has been replaced with Amazon's arrow-tipped 'Smile' logo. A modified version of Monopoly's Rich Uncle Pennybags is popping out of the cash drawer. He wields a scythe and his face is a skull-mask. Perched atop a protrusion on the register is a trustbuster era editorial cartoon image of Roosevelt, swinging his 'big stick.'

Amazon and Apple have an illegal price-fixing conspiracy (permalink)

A class action law firm has filed a suit against Apple and Amazon, accusing the companies of price-fixing Ios devices through an agreement that blocks third-party sellers from Amazon unless they're authorized by Apple. The suit should be a slam-dunk – but even more, the conduct it accuses Apple and Amazon of should never have been permitted in the first place.

40 years ago, antitrust law underwent a revolution. The pro-monopoly "scholars" of the Chicago School of Economics, led by the Nixonite criminal Robert Bork, argued that antitrust enforcement should limit itself to punishing companies that used market power to raise prices.

Proponents of this "consumer welfare" standard claimed that they just wanted to bring some "objectivity" to the question of monopoly. They said that asking the courts to tame corporate power led to an inconsistent, chaotic world where you couldn't make a commercial plan without the fear that some judge would block it, because it smelled like an antitrust violation.

The pro-monopolists were unabashed about their support for monopolies. Bork and co. claimed that monopolies were "efficient" and could unleash wonders if we'd only let them dominate their markets and end pointless "wasteful competition." This sentiment is echoed by today's robber barons – think of Peter Thiel's "competition is for losers" or Warren Buffett's unslakable lust for businesses with "wide, sustainable moats."

But the monopolists claimed that they weren't in it for themselves. They said that they wanted to rule without challenge on our behalf – that they would lower prices, improve efficiency, and make us all better off. Indeed, they exhorted regulators to go hard after monopolists that raised prices.

This was a smokescreen. The monopolists insisted that appearances were deceptive: just because a company attained a monopoly and raised prices, we shouldn't assume that the price-rise was due to the monopoly! Maybe the cost of materials or labor went up. Maybe the moon is in Venus?

So, the monopolists said, regulators must ardently pursue monopolistic price hikes, but this was not the same as "price hikes committed by monopolists." They argued for the use of abstract and complex models to distinguish the two – models that they alone knew how to make and could charge handsomely for. In an absolutely unforeseeable turn of affairs, these models always proved that the price-hiking companies that commissioned them were innocent.

You know Franklin's maxim, "it is better 100 guilty Persons should escape than that one innocent Person should suffer?" Substitute "monopolist" for "person" and you've got the judicial theory of the monopolists. They argued that "good" monopolies were so freaking awesome for all of us that regulators should approach their job with the utmost of care, lest the accidentally squash one of these invaluable monopolies and deprive us all of their genius.

The monopolists were also part of the broader deregulation movement, the Reaganite notion that "Government is not the solution to our problem, government is the problem." They advocated for a smaller, weaker DoJ and FTC, stripping them of headcount and capability.

The result is that, 40 years later, even obvious instances of monopolies using their market power to raise prices are ignored by regulators. When Apple and Amazon struck their 2019 bargain to put Apple in charge of who could sell its products on Amazon, it was obvious that Apple was going after discounters.

Three years later, that's exactly what they've done, with the incontrovertible effect that people are paying more for the same goods because of market power – the only thing trustbusters were supposed to prevent.

Despite the massive red flags this conduct threw off, the Trump administration's monopoly regulators let it commence. In that regard, they were no different from their predecessors all the way back to Reagan, who were so demoralized, underfunded and/or corrupt that they rarely bestirred themselves, even in the face of overwhelming evidence.

The Biden administration's trustbusters are different. FTC chair Lina Khan, DOJ antitrust chief Jonathan Kanter and White House antitrust czar Tim Wu have made it clear that antitrust is no longer in a coma – it's awake, it's back, and it's pissed:

But it's much harder to unwind existing monopolies than it is to prevent them in the first place: "if you wanted to get there, I wouldn't start from here." Demonopolizing America is a generation-long project, and in the meantime, companies like Amazon and Apple will get away with murder:

The Apple-Amazon scam reveals the lie at the core of the "consumer welfare" theory: that companies will use their market power to help their customers, not pad their wallets. We're told that Apple and Amazon are rivals – they compete for music, video streaming, etc – but there's one area they absolutely agree on: monopolists should fuck over their workers and customers in every available way, to the greatest extent possible.

Both companies agree that their workers shouldn't be able to form unions. They agree that new market entrants shouldn't be able to make compatible products that make it easy for their customers to quit. They believe that they shouldn't have to internalize the planet-destroying costs of their business. They believe that they should be able to use their platform status to rip off their business customers' products, clone them, and then relegate the originals to page ten million of their product listings.

Same with Google: Apple and Google are meant to be great rivals, but the single largest deal Google and Apple do every year is the billions that Google pays to Apple to let it monopolize search on Ios and spy on Apple customers. Apple claims it's different from Google because it has ethical standards that keep it from spying on you, but those ethical standards are for sale for the low cost of $15 billion.

This is why right wing crybabies who wet their pants over "woke" corporations are fucking idiots. Every large corporation agrees on everything that matters: low pay for workers with no labor rights; no monopoly enforcement, no environmental standards and no taxes. Everything else is a rounding error.

Disney putting a gay character in one of its movies doesn't make it "progressive" unless you think a "progressive" future is one where our lives are still dominated by 150 untouchable billionaires, but we replace half of them with queer people, women, and/or people of color.

Remember: Rupert Murdoch sold Fox to Disney. Either that deal was made possible by a secret, Romeo-and-Juliet style romance between Bob Iger and Murdoch, whose great ideological differences were bridged by cosmic love…or they had the same ideology all along;

"Social justice" isn't compatible with corporate power. As important as workplace discrimination and media stereotyping are, fixing these without fixing corporate power is not "progressive." Gay billionaires like Peter Thiel and far-right woman politicians like Katalin Novák don't represent social progress.

The conservative coalition of bigots and billionaires depends on the latter reliably rooking the former. There is nothing surprising about "woke" companies pouring millions into the election campaigns of "Big Lie" politicians:

These politicians are Trumpy conspiratorialists second. Their first priority is unlimited corporate power: the power to crush workers, rip off customers, wreck the planet and dismantle all democratically accountable institutions. That's the same priority as every major corporation. There's no such thing as a "progressive" multinational.

Globe-spanning, price-gouging corporations want you to believe that inflation was caused by giving workers enough money to survive during the pandemic, not by their price-fixing and decades of offshoring:

Which is why the right can never be "populist." They can never be on the side of "working class" people, even the white, straight, Christian male working class. Corporate power works solely in service to its shareholders – and the more workers and customers have, the less shareholders have.

That was always the point of neoliberalism: stripping us of economic and social gains of the post-war era and sending us back belowstairs, to tug our forelocks for our social betters:

(Image: Andrés Moreira, CC BY-SA 2.0, modified)

Hey look at this (permalink)

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Colophon (permalink)

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