Pluralistic: It's not a crime if we do it with an app (25 Jan 2025)


Today's links


Two caricatures of top-hatted millionaires whose bodies are bulging money-sacks. Their heads have been replaced with potatoes. The potatoes' eyes have been replaced with the hostile red eye of HAL 9000 from Kubrick's '2001: A Space Odyssey.' They stand in a potato field filled with stoop laborers. The sky is a 'code waterfall' as seen in the credit sequences of the Wachowskis' 'Matrix' movies.

It's not a crime if we do it with an app (permalink)


Picks and Shovels is a new, standalone technothriller starring Marty Hench, my two-fisted, hard-fighting, tech-scam-busting forensic accountant. You have TWO DAYS LEFT to pre-order it on my latest Kickstarter, which features a brilliant audiobook read by Wil Wheaton.

The core regulatory proposition of the tech industry is "it's not a crime if we do it with an app." It's not an unlicensed taxi if we do it with an app. It's not an illegal hotel room if we do it with an app. It's not an unregistered security if we do it with an app. It's not wage theft if we do it with an app.

Inflation is one of the most politically salient factors of this decade, and so much of inflation can be attributed to a crime, done with an app, with impunity for the criminals. The entire food supply has been sewn up by cartels of 2-5 giant companies, and they colluded to raise prices, and bragged about it, and got away with it, because neoclassical economists insist that it's impossible for this kind of price fixing to occur in an "efficient market."

Some of these cartels are well-known, like the Coke/Pepsi duopoly. Pepsi's bosses boasted to their shareholders about "Pepsi pricing power," and how they were able to raise prices over the inflationary increases caused by covid and the Russian invasion of Ukraine:

https://pluralistic.net/2023/03/11/price-over-volume/#pepsi-pricing-power

You might know that pretty much every packaged good in your grocery store is made by one of two companies, Unilever and Procter and Gamble. Both CEOs boasted to their investors about their above-inflation price increases:

https://pluralistic.net/2021/11/20/quiet-part-out-loud/#profiteering

But other cartels are harder to spot. It may seem like your grocer's eggs department is filled with many different companies' products. In reality, a single company, Cal-Maine Foods, owns practically every brand of eggs in the case: Farmhouse Eggs, Sunups, Sunny Meadow, Egg-Land’s Best and Land O’ Lakes. They made record profits after the pandemic and through bird flu, a fact that CFO Max Bowman attributed to "significantly higher selling prices" and "our ability to adapt to inflationary market pressures":

https://pluralistic.net/2023/01/23/cant-make-an-omelet/#keep-calm-and-crack-on

But Cal-Maine is comparatively transparent. The other food cartels – especially those that serve the restaurant sector – are harder to spot. In The Lever, Katya Schwenk describes how four companies – Lamb Weston, JR Simplot, McCain Foods and Cavendish Farms – have captured the frozen potato market and all that comes with it (fries, tater tots, etc):

https://www.levernews.com/the-rise-of-big-potato/

These companies have been hiking prices for years, but really started to turn the screws during the post-covid inflationary period. One of Schwenk's sources is Josh Saltzman, owner of the DC sports bar Ivy and Coney. Ten years ago, Saltzman charged $3 for fries; now it's $6 – and Saltzman's margins have declined. Saltzman has a limited number of suppliers, and they all get their potatoes from Big Potato, and they bundle those potato orders with their other supplies, making it effectively impossible for Saltzman to buy his potatoes from anyone else.

Big Potato controls 97% of the frozen potato market, and any sector that large and concentrated is going to be pretty cozy. The execs at these companies all meet at industry associations, lobbying bodies, and as they job-hop between companies in the cartel. But they don't have to rely on personal connections to rig the price of potatoes: they do it through a third-party data-broker called Potatotrac. Each cartel member sends all their commercially sensitive data – supply costs, pricing, sales figures – to Potatotrac, and then Potatotrac uses that data to give "advice" to the cartel members about "optimal pricing."

This is just price-fixing, with an app. The fact that they don't sit around a table and openly discuss pricing doesn't keep this from being price-fixing. What's more, they admit it. A director at McCain said that "higher ups" forbade anyone in the company from competing on price. A Lamb Weston exec described the arrangement as everyone "behaving themselves," chortling that they'd "never seen margins this high in the history of the potato industry." Lamb Weston's CEO attributed a 111% increase in net income to "pricing actions."

Lamb Weston's execs understand that they're driving small restaurants out of business, and that the real beneficiaries are big chains that can pass the price increases onto their customers, like "Chili’s and the Texas Roadhouses and Cheesecake Factory":

https://app.tegus.co/guest/document/view/67Hf3DiMGQ944SkfpRhLfNeiqekjA67sm2dxTCYtjoggUaJXk2chDg9wxMnZ

This is by no means unique to the potato industry. A data-broker called Agri Stats works with America's largest meat-packers to rig the price of meat – packers send Agri Stats the same kind of data that Big Potato sends to Potatotrac, and Agri Stats sends back the same "recommendations" that allow them to raise meat prices across the board, in lockstep:

https://pluralistic.net/2023/10/04/dont-let-your-meat-loaf/#meaty-beaty-big-and-bouncy

Lots of food categories are as inbred as meat and potatoes: "four firms controlled nearly 80 percent of the almond milk market, for instance. Three companies controlled 83 percent of the canned tuna market, and four companies controlled more than 86 percent of the microwave popcorn market."

The "price fixing is legal if we do it with an app" gambit is not just about food, either. Apps like Realpage let big corporate landlords – who've bought up a sizable fraction of all the available homes in America – collude to raise rents:

https://pluralistic.net/2024/02/27/ai-conspiracies/#epistemological-collapse

And private equity companies have rolled up all the fire truck companies, hiking the price of trucks, creating backlogs and bottlenecks for parts and service, and starving the nation's municipalities (including Los Angeles) of fire-fighting equipment:

https://www.thebignewsletter.com/p/did-a-private-equity-fire-truck-roll

This kind of price-fixing was central to the enforcement actions of the Biden administration's trustbusters at the FTC, and their investigations and actions inspired state AGs and private parties to bring their own antitrust suits. The question is, will Trump's enforcers continue this agenda? And will Trump's judges – steeped in Heritage Foundation economics that insists that monopolies are "efficient" – find in their favor if they do?

Inflation has lots of causes, it's true. But when an industry is consolidated enough to take advantage of a data brokerage or just engage in tacit collusion, any source of inflation – war, disease, weather – allows whole sectors to raise prices together, and keep them high, long after the shock has passed.


Check out my Kickstarter to pre-order copies of my next novel, Picks and Shovels!

(Image: Cryteria, CC BY 3.0, modified)

Hey look at this (permalink)


A Wayback Machine banner.

Object permanence (permalink)

#20yrsago What if Bill Gates hired Linus Torvalds? https://web.archive.org/web/20050207155531/https://www.wired.com/wired/archive/13.02/microsoft_pr.html

#15yrsago Rogers Canada forces Android update that takes away root access https://mobile.slashdot.org/story/10/01/26/2358237/Canadian-Android-Carrier-Forcing-Firmware-Update

#15yrsago Sane copyright doesn’t treat all copying as the same https://www.theguardian.com/technology/2010/jan/26/copyright-cory-doctorow

#15yrsago ACTA: the leaked secret memos https://web.archive.org/web/20100130005036/https://www.michaelgeist.ca/content/view/4730/125/

#10yrsago Plan C: The top secret Cold War plan for martial law in the USA https://www.muckrock.com/news/archives/2015/jan/26/plan-c-top-secret-cold-war-battle-plan-bring-unite/

#10yrsago Google strong-arms indie musicians into accepting brutal, crowdfunding-killing deal for streaming service https://zoekeating.tumblr.com/post/108898194009/what-should-i-do-about-youtube

#10yrsago Great Firewall of Cameron blocks sex-abuse charities https://www.theguardian.com/technology/2015/jan/24/internet-filters-block-sex-abuse-charities

#10yrsago The Haunted Mansion was almost the Tiki Room https://web.archive.org/web/20150130023018/longforgottenhauntedmansion.blogspot.com/2015/01/walt-disneys-enchanted-creepy-room.html

#5yrsago Two years after a federal law banning shackling women during childbirth was passed, prisoners in America are still giving birth in chains https://www.theguardian.com/us-news/2020/jan/24/shackled-pregnant-women-prisoners-birth

#5yrsago Andrew Cuomo’s naked hostility drives out MTA president Andy Byford, the “Train Daddy” who has transformed the world’s rail systems https://www.railwayage.com/passenger/you-blew-it-andrew-cuomo/

#5yrsago Fatal car wrecks are correlated with stock-market fluctuations https://www.sciencedirect.com/science/article/abs/pii/S0167629619301237

#5yrsago Banks have returned to the pre-2008 world of automatic credit-limit increases for credit cards used by already indebted people https://www.bloomberg.com/news/articles/2020-01-23/banks-are-raising-credit-card-limits-without-asking-customers

#1yrago The long sleep of capitalism's watchdogs https://pluralistic.net/2024/01/26/noclar-war/#millionaire-on-billionaire-violence

Upcoming appearances (permalink)

A photo of me onstage, giving a speech, holding a mic.


A screenshot of me at my desk, doing a livecast.

Recent appearances (permalink)


A grid of my books with Will Stahle covers..

Latest books (permalink)


A cardboard book box with the Macmillan logo.

Upcoming books (permalink)

  • Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025

  • Enshittification: Why Everything Suddenly Got Worse and What to Do About It, Farrar, Straus, Giroux, October 2025
    https://us.macmillan.com/books/9780374619329/enshittification/

  • Unauthorized Bread: a middle-grades graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025


Colophon (permalink)

Today's top sources: Bruce Schneier (https://www.schneier.com/crypto-gram/)

Currently writing:

  • Enshittification: a nonfiction book about platform decay for Farrar, Straus, Giroux. Status: second pass edit underway (readaloud)

  • A Little Brother short story about DIY insulin PLANNING

  • Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS FEB 2025

Latest podcast: Enshittification isn't caused by venture capital https://craphound.com/overclocked/2025/01/20/enshittification-isnt-caused-by-venture-capital/

This work – excluding any serialized fiction – is licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

https://creativecommons.org/licenses/by/4.0/

Quotations and images are not included in this license; they are included either under a limitation or exception to copyright, or on the basis of a separate license. Please exercise caution.

How to get Pluralistic:

Blog (no ads, tracking, or data-collection):

Pluralistic.net

Newsletter (no ads, tracking, or data-collection):

https://pluralistic.net/plura-list

Mastodon (no ads, tracking, or data-collection):

https://mamot.fr/@pluralistic

Medium (no ads, paywalled):

https://doctorow.medium.com/

Twitter (mass-scale, unrestricted, third-party surveillance and advertising):

https://twitter.com/doctorow

Tumblr (mass-scale, unrestricted, third-party surveillance and advertising):

https://mostlysignssomeportents.tumblr.com/tagged/pluralistic

"When life gives you SARS, you make sarsaparilla" -Joey "Accordion Guy" DeVilla

Join the Discussion at ChinWag