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Michael Doerrer

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AAI’s Moss Talks Artificial Intelligence and Agriculture With the Bulletin of Atomic Scientists

In a May 23, 2022 article, Who hacked the slaughterhouse? When robots and AI take over farms, Diana Moss highlighted how data and digital farming factor into competition issues involving agriculture and cropping systems. From the article:

…Still, even farmers with access to digitized tools are encountering problems, according to Diana Moss, president of the American Antitrust Institute. Farmers who sign technology agreements with big agricultural biotech companies often sign away their rights to the data, leading to what’s known as a “closed cropping system.”

“The closed cropping system basically says, ‘Look, you get to use Monsanto products only. Or you get to use Dow products only,’” Moss said of farmers’ choices for the proprietary seeds, chemicals, and more that go hand-in-hand with corporate data collection. “The big ag biotechs are engineering their cropping systems to be non-interoperative with rival technologies.”

Once farmers are locked into a company that holds their data, both farmers and consumers will pay higher prices, Moss said: “It contributes to a very, very fragile agricultural supply chain.”

How can the risks of automated agriculture be minimized? Advanced technology in agriculture is not inherently bad and is poised to deliver benefits. That said, problems arise when humans fail to predict and prevent the unintended consequences of its use.

“Much like in the digital tech sector with Facebook, Amazon, and Google, it’s all about having just a few or a single dominant player with really strong incentives to use data to control competition, to the detriment of growers and consumers,” Moss said. “Merger control and strong antitrust enforcement is really the starting point for controlling all of this.”

 

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Financial Times Reports on Increasing Antitrust Attention on Private Equity, Citing AAI Report on Competition Concerns from Private Equity in Healthcare

The May 23, 2022 Financial Times story, Private Equity Moves into the Antitrust Spotlight, cites AAI’s report on private equity in healthcare. In June, AAI in collaboration with the University of California at Berkeley Petris Center, released a pathbreaking study of the competition impacts of surging private equity investment in healthcare. The report urged lawmakers and enforcers to increase their scrutiny of private equity companies’ moves into healthcare, including evasion of antitrust scrutiny and their roll-up and buy-and-build strategies that threaten to consolidate markets and decrease competition. The Financial Times article reports on the recent moves from the United States Department of Justice to do just that.

From the FT article:

“Laura Alexander at the American Antitrust Institute said private equity firms have been ‘talented at finding regulatory cracks . . . they are particularly adept at exploiting reporting thresholds and reporting requirements for antitrust review.’”

Full Article Provided Here

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Law360 Highlights AAI Analysis in Reporting on Latest Rash of Airline Merger Proposals

Law360 focused on AAI’s analysis of the Spirit-Frontier merger is its latest reporting on airline mergers. The article Biden Antitrust Efforts May Trip Up JetBlue’s Spirit Bid discusses AAI’s work, as follows:

The American Antitrust Institute, which already raised concerns that the proposed Frontier-Spirit merger would eliminate competition, said a potential JetBlue-Spirit combination raises similar concerns.

“Higher concentration on city-pairs raises concerns about effects on fares, ancillary fees and service quality,” AAI President Diana L. Moss said. “Also, much like Spirit-Frontier, a Spirit-JetBlue merger would raise questions about benefits that could be squeezed from the merger. They have very different business models — Spirit is ‘ultra low fares’ and JetBlue is just ‘low fares’ — and combining them raises questions about what types of benefits they could legitimately claim, and the probability that the combined airline could actually deliver on those benefits.”

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NYT Highlights AAI Opposition to Spirit-Frontier Merger, Cites AAI Work on Dubious Benefits From Past Airline Mergers

The April 8, 2022 New York Times story Bidding War for Spirit Could Undercut Power of Four Big Airlines cites AAI’s opposition to the proposed merger of Spirit and Frontier. Last week, AAI sent a letter to the U.S. Department of Justice explaining why the proposed merger would likely harm consumers through higher fares, ancillary fees, and lower quality. The letter also explains why any promised benefits from the merger should be viewed skeptically by enforcers. The NYT article cites AAI research on the how past airline mergers have had difficulty in delivering promised benefits. The 2013 report Delivering the Benefits? Efficiencies and Airline Mergers has been cited widely over the last several years.

From the NYT article:

“Diana Moss, the president of the American Antitrust Institute, a left-leaning organization that has long called for tougher enforcement of competition laws, has asked the Justice Department to block the Spirit-Frontier deal. Ms. Moss and others published a study in 2013 that concluded that airlines don’t deliver on the benefits they claim their mergers will provide.”

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AAI Urges Ninth Circuit to Reject Apple’s Overbroad Assertions of Copyright that would Thwart Competition for Security Research (Apple v. Corellium)

AAI has joined with 13 antitrust and intellectual property law scholars and the Stanford Law School Juelsgaard Intellectual Property and Innovation Clinic in submitting an amicus brief urging the Ninth Circuit to treat a security firm’s limited replication of Apple’s iOS operating system to conduct security research as fair use under the Copyright Act.

In Apple v. Corellium, Apple sued Corellium alleging that it infringed Apple’s copyrights in iOS and circumvented its security measures in violation of the federal Digital Millennium Copyright Act (“DMCA”). Corellium admitted to creating a “virtualized” version of iOS that its customers can use in the cloud or on-premises to conduct independent security research, but it argued that its limited copying was fair use.  The district court ruled for Corellium. On appeal, Apple continues to press its copyright and DMCA claims.  

The amicus brief urges the Ninth Circuit to affirm the district court and vindicate the important public interest in protecting competition reflected in the fair use doctrine. The brief explains that the fair use doctrine in copyright law threads the needle between antitrust and copyright by ensuring that copyright provides creators with necessary but limited incentives to create without unduly restraining competition.  In assessing the public interest factor under fair use doctrine, courts should consider how a copyright assertion may be abused to illegitimately expand exclusive rights beyond their proper scope and into other markets.  

Here, Apple’s assertion of copyright over its iOS software should not be permitted to interfere with competition in the separate markets in which Corellium operates. First, Corellium’s virtualization product furthers the public interest in facilitating independent security research. Permitting an overbroad assertion of copyright would restrain competition in the distinct security research tools market and inhibit independent researchers from conducting valuable research. Second, Corellium’s product facilitates jailbreaking, which makes it easier for iPhone app developers to test and users to access apps outside of Apple’s controlled environment. Permitting an overbroad assertion of Apple’s copyright for iOS software would block this tool from expanding competition in app testing and distribution.

The brief was written by Professor Phil Malone of the Stanford Law School Juelsgaard Intellectual Property and Innovation Clinic, with substantial assistance from students Bridget Amoako and Brendan Saunders.

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Law360 Highlights AAI’s Report “The Critical Role of Private Antitrust Enforcement in the United States” in Coverage of Bank ATMs Fees Price Fixing Case

Law360 highlighted AAI’s Report The Critical Role of Private Antitrust Enforcement in the United States in Coverage of ATMs Fees Case in its coverage of the settlement and legal fees in the bank ATM fees price fixing case. 

The article, ATM Antitrust Plaintiff Law Firms Seek $20M In Legal Fees notes that: “In pressing for the award, the law firms cited an analysis of a 2020 report on private antitrust enforcement by the American Antitrust  Institute and the University of San Francisco that found the median fee awarded for antitrust class settlements between $50 million and $99 million was 30% of the award. The case against the banks was settled for $66.74 million.”

The case reference is: Plaintiffs’ Motion for Award of Attorneys’ Fees, Reimbursement of Litigation Expenses, and Service Award for Class Representatives, Mackmin et al. v. Visa Inc., No. 1:11-cv-01831 (D.D.C. filed Feb. 26, 2022).

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AAI and Americans for Financial Reform Awarded Grant to Study Private Equity and Competition

The Economic Security Project Antimonopoly Fund has awarded a grant to AAI and Americans for Financial Reform to study the impact of private equity funds on competition in the health care sector. 

This research will build on path breaking work that both organizations have done to explore and highlight private equity funds’ influence on concentration, quality, and prices in health care. Vice President of Policy, Laura Alexander, will lead this project for AAI.