Monopolists Just Got Their Hall Pass Revoked

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👇 Spend three minutes reading this 876-word newsletter to learn about:

• What Mark Zuckerberg is willing to do to win the AI arms race.
• Why Trump’s own IRS watchdog is pushing back on DOGE.
• Republicans’ insidious new strategy in their fight against clean energy.
• How monopolists could lose their hall pass.

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💼 The IRS defends its freshmen. As part of DOGE maniac Elon Musk’s “chain saw to the federal bureaucracy,” most federal agencies were instructed to terminate probationary employees earlier this year. That included the Treasury Department, which directed the Internal Revenue Service to send termination notices to 7,315 probationary employees in February, citing poor performance. But a new report from the Treasury’s acting inspector general asserts there’s no evidence these new hires were slacking on the job and instead found that nearly half of them were “fully successful,” while the other half had not yet received performance reviews.

• The mass layoffs reversed former President Joe Biden’s efforts to hire 30,000 new staff at the IRS, to bulk up enforcement on tax evasion, and bring in billions in government income. 

🤖 Everything’s coming up clanker. Meta is overhauling its artificial intelligence operations and parting with executives of its AI division — known as Meta Superintelligence Labs — amid internal turmoil over the company’s strategy and performance in the AI arms race. According to The New York Times, CEO Mark Zuckerberg is “sparing no expense and is willing to upend his company” to dominate Google, Amazon, and Microsoft in AI development. That means pursuing increasingly advanced AI at all costs, no matter the human and environmental consequences, alienating some of the company’s top developers.

♻️ Clean energy coup. Republicans, with the help of the Federal Trade Commission, are exploiting antitrust law to kill asset management giants’ clean energy initiatives. An initial case, led by Texas Attorney General Ken Paxton, alleges that BlackRock, State Street, and Vanguard engaged in an anticompetitive conspiracy to drive down coal production as part of an industrywide “Net Zero” initiative. The Federal Trade Commission and the Department of Justice added their support in May, agreeing that the asset managers misapplied antitrust law. A district court in Texas recently allowed the case to proceed, to the public delight of the FTC’s Republican Chairman Andrew Ferguson.

Election denial isn’t cheap. Newsmax will pay $67 million to settle a defamation lawsuit from Dominion Voting Systems, the voting system that the right-wing news channel’s anchors accused of interfering in the 2020 election, despite a lack of evidence. In 2023, Fox News handed over a $787 settlement to Dominion over its similarly disparaging election coverage.

Monopolists’ legal shield is in jeopardy. A “get out of jail free” legal defense exploited by giant corporations like Apple and Live Nation to defend against antitrust lawsuits is on its last legs. The defense, known as the “refusal to deal” doctrine, has historically worked to corporations’ benefit — but in a series of recent court victories for federal antitrust enforcers, the legal argument is increasingly being denied by federal judges as a blanket legal shield. 

It’s why everything sucks now. “Refusal to deal” is a key tactic that monopolies use to leverage their market power and deny services or access to core infrastructure to competitors. These anticompetitive legal restraints, usually enforced through “exclusive contracts,” have been at the heart of virtually every major monopoly struck down by the government, from the railroad empires of the Gilded Age to 1990s tech conglomerates like Microsoft. These exclusive contracts are the reason why your ticket prices are exorbitantly high at LiveNation-controlled venues, why Google can monetize your data, and even why ice cream vending machines are famously always broken at McDonald’s.

Fair markets refused. These practices have long violated the Sherman Act, a 1890 law designed to promote free-market competition. But despite extensive legal precedent confirming refusal to deal to be anticompetitive, courts began in the 1970s to interpret antitrust laws more narrowly around the now-discredited consumer welfare standard. Then, in 2004, the Supreme Court handed big businesses a favorable ruling that offered an all-encompassing shield against antitrust lawsuits, even ones that don’t rely on refusal to deal as a central claim. 

• Archconservative Justice Antonin Scalia delivered the Supreme Court’s majority opinion in the 2004 ruling, determining that antitrust law should not interfere with Verizon’s practice of excluding competitors from its telecommunications network. 

A monopoly hall pass revoked. Since then, companies facing monopolization lawsuits have routinely tried to dismiss antitrust cases by using this Supreme Court ruling to argue that any exclusionary or anticompetitive action is legal. Meta successfully used this argument to strip out certain parts of the government’s recent monopolization lawsuit against the firm. But more recently, judges have blasted the defense as a ruse. 

• Over the past year, Apple, LiveNation, and the real estate technology company CoStar have each tried the refusal to deal defense against government antitrust enforcement — and lost.

TAKE ACTION

Trump’s EPA Just Repealed The Legal Basis For Tackling Climate Change. The Environmental Protection Agency is required to take public comments on this proposed repeal — and that means we have a chance to flood the docket with opposition. Add your public comment today. Tell the EPA that the endangerment finding must stay.

We can’t let Trump’s politics overrule long-settled science. The climate crisis is accelerating, and this repeal will take us backward at the worst possible time if we don’t stop it.

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