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Warren’s antitrust bill would boost government control over biggest companies



Democratic presidential hopeful Massachusetts Senator Elizabeth Warren gestures as she arrives for a town hall devoted to LGBTQ issues hosted by CNN and the Human rights Campaign Foundation at The Novo in Los Angeles on October 10, 2019.

ROBYN BECK | AFP | Getty Images

Presidential hopeful Sen. Elizabeth Warren is drafting a sweeping piece of legislation that would go far beyond breaking and blocking deals between companies and would exert more control over some of America’s largest firms.

People with knowledge of the bill and who support it say the measure takes important steps towards clarifying the rule book under which the country’s largest companies play, after years of lax or incomplete oversight. Its detractors, including academics and antitrust lawyers who spoke with CNBC on the condition of anonymity, say it takes unprecedented steps to legislate America’s largest companies that undoes decades of jurisprudence and weakens the country’s competitive stance.

The bill, tentatively named the Anti-Monopoly and Competition Restoration Act, is coauthored with Rep. David Cicilline, D-R.I., who chairs the antitrust subcommittee on the House Judiciary panel. Cicilline has said he will not introduce new antitrust legislation until the investigations he is leading into the growing power of big tech companies like Facebook have concluded.

Bloomberg News first reported on the anti-merger aspects of the bill.

CNBC has reviewed a draft of the bill. The legislation ultimately proposed may take a different shape. But its ideas demonstrate how dramatically Warren wishes to approach antitrust policy in the U.S. Warren, who has built her top-tier Democratic presidential campaign on a populist call for structural change in the American economy, has already pushed for breaking up big technology companies like Amazon and Facebook.

The proposed antitrust legislation goes far beyond regulating merger-and-acquisition activity and ending megamergers. It outlines a set of provisions to apply to any company with “market power.” The line Warren draws for such companies is far below the standard set for monopolistic companies, which hold 70% market share. The draft bill would instead focus on any companies with buying power, which could include corporations with market share as low as 25%. It would also focus on all companies with more than $40 billion in sales. The guidelines cover everything from the way these companies treat their competitors to how they price their products.

Spokespeople for Warren and Cicilline declined to comment.

The guidelines mimic similar ones laid out in Europe, which has taken a more aggressive approach to antitrust than the U.S. with its “abuse of dominance standard.” Critics of Europe’s approach argue there is a reason that the world’s most innovative companies, like Google, have been born in Silicon Valley and not Paris or Berlin. Its defenders argue concerns over the potential ability of companies like Amazon and Facebook to abuse their power overrides concerns of economic power.

“Over the last 3 decades, powerful corporations have amassed too much power over the United States economy, stifling competition in United States markets and harming consumers, workers, small businesses and entrepreneurs, and innovation,” the bill’s authors write.

Undoing Supreme Court rulings

A key part of the bill prohibits dominant companies from “denying access to essential facilities.” That language flies directly in the face of an influential Supreme Court case, Verizon v. Trinko.

That 2004 ruling protects companies from lawsuits if they do not allow their competitors access to infrastructure deemed necessary for business. Broadly speaking, such infrastructure could be access to anything from a bridge to a search engine. The Trinko case stemmed from a lawsuit against Verizon for not providing competitors access to the telephone network it had built up.

With that Supreme Court blessing, dominant companies have largely been free of the threat of litigation to give certain access to competitors. But Warren’s draft bill would codify into law what the Supreme Court has declined to impose punishment on.

“This (proposed regulation) would essentially change the presumption that a refusal to share facilities – which is now presumptively lawful – to nearly conclusively unlawful,” said Professor John Lopatka, an antitrust scholar at Penn State Law.

If enacted, the measure could have broad repercussions, including on companies like Amazon and Facebook that deal with the flow of data, an increasingly important tool in today’s economy. Facebook was accused by the U.K. Parliament last year of cutting off access to its data to Twitter’s Vine social video app, impairing its competitor in the process.

The idea of monitoring the flow of information as anti-competitive behavior has been echoed elsewhere, and on a bipartisan basis. Republican Makan Delrahim, whom Trump appointed the head of the Justice Department’s antitrust division, recently said in a speech the DOJ plans to be “especially vigilant about the potential for anti-competitive effects when a company cuts off a profitable relationship supplying business partners with key data, code, or other technological inputs in ways that are contrary to the company’s economic interests.”

Others, though, say such stipulations in the draft bill would force companies to give up the rewards of their own investment and ideas by passing them on to others.

“The essence of Trinko was we want to create an incentive for firms to create these facilities to innovate and come up with this infrastructure. If you require a firm that succeeds to share that infrastructure with its rivals, the firm has less of an incentive to make those investments,” said Professor Lopatka.

The bill would also place limits on the ability of any company with market power to engage in predatory pricing. Predatory pricing – the act of undercutting a rival with prices so low that they go out of business – is rarely litigated because it is nearly impossible to prove if it is not shown that a company will be successful in its efforts.

According to the bill, though, it wouldn’t matter if a company’s efforts to undercut its rivals are likely to succeed. It would only matter whether a company prices its products for less than it costs to make them. Using low costs to hammer out competition is a tool that is frequently employed by larger companies like Walmart. Toys R Us blamed the big-box retailer in part for its liquidation by claiming the big box retailer slashed its toy prices so low it could not compete.

Lawyers and academics who oppose the bill say the language will hurt consumers rather than helping them by limiting the ability of companies to pass on cost-savings they get through efficiencies of scale. It may also make it harder for new entrants to take on giants like Amazon, they say.

The bill recommends a number of punishments for executives at companies who knowingly defy it, including fines and jail time. The Sherman Act, a federal statute that outlaws monopolistic business behavior, does allow the government to prosecute CEOs who lead allegedly anti-competitive companies. But such prosecutions are rare, and are reserved for CEOs engaged directly in an activity that limits competition, like price-fixing.

Moving on from Bork

Warren is among a growing number of academics and lawmakers who have argued that U.S. antitrust regulation doesn’t meet the needs of the 21st-century economy.

Much of current U.S. policy originates from the late conservative judge and legal scholar Robert Bork, who looked at antitrust through the lens of its effect on the consumer, or “consumer welfare.” However, Bork’s writing, which measured that impact by looking at prices, did not anticipate the rise of companies like Google and Facebook, which offer their products largely for free, but take data in exchange for the service. The bill’s authors see Bork’s “consumer welfare” reasoning as too “narrowly defined.”

“Antitrust laws … were created to protect fair, open, and competitive markets and to prevent corporations from abusing their power to stifle competition,” write the draft bill’s authors.

Other presidential candidates have offered their own solutions. Bernie Sanders on Friday unveiled his “High-Speed Internet for All” proposal that would treat the internet like a public utility. The plan would break up what the campaign calls “internet service provider and cable monopolies,” stop service providers from offering content and end what it calls “anti-competitive mergers.”

Joe Biden, who has called concentration of power in America “a big economic problem,” wants to create a new department in the DOJ to review pending and past deals. Biden served as vice president under Barack Obama, who was president during a two-year Federal Trade Commission investigation into whether Google’s search results violated antitrust laws which did not bring charges or sanctions.

The company is currently being investigated by the department of justice and 50 attorneys general for potential antitrust violations. The attorneys general investigation recently expanded their focus from Google’s advertising business to its search and android operations.

When asked by CNBC’s John Harwood if the administration should have been tougher, Biden said, “There’s a lot of things you can go back in every administration and say, ‘Well, maybe would have done something differently.’ But at the moment, there wasn’t much else that could be done at that time.”



Libyan Militant Is Sentenced to 19 Years in Deadly Benghazi Attacks




A Libyan militant was sentenced on Thursday to more than 19 years in prison by a federal judge for his role in the 2012 Benghazi attacks that killed four Americans, including the United States ambassador.

The militant, Mustafa al-Imam, was convicted by a jury last year of conspiring to provide material support to the terrorists who were responsible for the siege on the main diplomatic mission and a nearby C.I.A. annex.

During the trial in United States District Court in Washington last spring, the jurors also convicted Mr. al-Imam of destroying the complex and endangering lives, but deadlocked on murder charges.

Mr. al-Imam, 47, was the second person sentenced in the Sept. 11, 2012, attack, which became the subject of a contentious congressional inquiry sought by Republican critics of the Obama administration and Hillary Clinton, the secretary of state at the time of the siege.

“We have not rested in our efforts to bring to justice those involved in the terrorist attacks on our facilities in Benghazi, which led to the death of four courageous Americans — Tyrone Woods, Sean Smith, Glen Doherty and Ambassador Christopher Stevens — and we never will,” John C. Demers, assistant attorney general for national security, said in a statement on Thursday. “Those responsible for these crimes must be held accountable.”

Judge Christopher R. Cooper, who presided over the case, sentenced Mr. al-Imam to 19 years and six months in prison.

Matthew J. Peed, a lawyer for Mr. al-Iman, said in an email on Thursday night that an appeal was in the works.

“We are disappointed by the sentence, which was based on allegations the jury did not believe,” Mr. Peed wrote. “The judge did find that Mr. al-Imam played a minor role in these events and harbored no animus towards America, which was encouraging. We look forward to an appeal, and hope those truly responsible for this attack are brought to justice.”

Federal prosecutors had argued that Mr. al-Imam, who was captured in 2017 in Libya, should have received the maximum sentence of 35 years.

They said that cellphone records placed him at the complex during the attack and that he spent 18 minutes on the phone talking to the militia leader who orchestrated the siege, Ahmed Abu Khattala, while it transpired. The prosecutors said that Mr. al-Iman acted as the “eyes and ears” of Mr. Khattala, whom Judge Cooper sentenced to 22 years in prison in 2018, well short of the life sentence sought by the Justice Department.

In a sentencing motion for Mr. al-Imam, Mr. Peed wrote that his client was a frail, uneducated and simple man, “not a fighter, an ideologue or a terrorist.” The lawyer for Mr. al-Imam wrote that his client made a tremendous mistake when he agreed to help his friend, Mr. Khattala, damage and loot the complex.

In contrast to the five men awaiting military tribunals at Guantánamo Bay on charges that they plotted the Sept. 11, 2001, terrorist attacks in New York and Washington, Mr. al-Imam was tried in federal court, a venue opposed by the Trump administration.

Mr. Stevens, the ambassador, and Mr. Smith, another State Department employee, were killed when a mob of militants tried to storm the main United States diplomatic mission, which was set on fire. Mr. Woods and Mr. Doherty, who were contractors for the C.I.A., died later when a separate annex run by the agency was hit by mortars.

In 2016, an 800-page report by the House Select Committee on Benghazi delivered a broad rebuke of the State Department, Defense Department and C.I.A. for their failure to grasp the acute security risks in Benghazi and for maintaining diplomatic outposts that they could not protect. The report found no new evidence of culpability or wrongdoing by Mrs. Clinton.


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Indian women politicians face online abuse: Study | India News




Nearly 100 Indian women politicians faced abuse, including rape and death threats, on social media during elections last year, with researchers raising concerns over rising online violence against women globally.

A study by Amnesty International India said 95 female politicians received nearly 1 million hateful mentions on Twitter between March and May, one in five of which was sexist or misogynistic. In all, there were 724 women candidates.


Digital rights experts said gender-based online violence was increasing which was intimidating women and deterring them from putting themselves forward for public office.

“People should know what women in politics endure, what they have to put up with and how unequal it becomes for them,” said Shazia Ilmi, a member of India’s ruling Bharatiya Janata Party (BJP), in the report.

It was unclear if online abuse against women politicians was worsening or improving as the research was the first of its kind and scale in India, said an Amnesty spokesperson.

But Adrian Lovett, head of the World Wide Web Foundation, said gender-based online violence was on the rise globally in developed and well as developing countries.

He said this was exacerbating the digital divide between men and women which was getting worse as the number of people going online increased and more men than women logged on.

“Gender-based online violence is increasing,” Lovett told Reuters news agency at the World Economic Forum (WEF) Annual Meeting on Davos in the Swiss Alps.

“It is not particular to one country or one region. It is a reality in developing countries and an increasing challenge in North America, Europe and across the world.

“This is affecting political participation by women, especially young women being put off by the online harassment of women in public life.”

‘Silencing voices’

Amnesty declined to name the politicians in its study of India, where women hold 14 percent of seats in the lower and 11 percent in the upper house of parliament, compared to the global average of 24.5 percent, according to the Inter-Parliamentary Union.

Similar research conducted by Amnesty in Britain and the United States in 2018 studying 323 women politicians found that about 7 percent tweets mentioning them were hurtful or abusive.

Several female politicians in Britain chose not to stand again in the general election on December 12 last year, citing the level of online abuse they faced.

Two-thirds of female politicians told a survey by a British parliamentary committee last November that progress on tackling violence and online abuse against women in politics impacted their willingness to stand for re-election.

Amnesty urged Twitter to step up its response to violations and bring in more policies to protect women.

Twitter said abuse and harassment had no place on its platform, adding 50 percent of hateful content was identified by technology and not reports from people with the company aware that abuse stifled people’s ability to speak freely.

“We will never be done with our efforts to address abuse motivated by hatred, prejudice or intolerance – particularly abuse that seeks to silence the voices of those who have been historically marginalized, such as women,” a spokesperson said.

Reuters news agency


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Congressman Carter calls impeachment trial ‘big political stunt’




KILLEEN, TX — The heated debate continues as the Senate wraps up the third day of the impeachment trial, prompting nationwide reaction.

25 News caught up with Congressman John Carter (TX-31) for his opinion on the impeachment as he returned from Washington, D.C. and stopped by the Killeen ISD Career Center to talk to local students.

“I think it’s a great big political stunt that harms the republic. There are no crimes alleged,” said Congressman Carter.

The congressman did not mince words.

“I’m an old trial judge, and let me start off by telling you, in the United States of America, there is no such thing as common law, criminal law. Criminal law has to be statutory. In other words, there has to be a statue that this is against the law,” he said.

Congressman Carter says he thinks both charges are not statutory criminal actions.

“It is really not an appropriate action to impeach somebody,” he said.


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