“iRobot, the creator of Roomba, filed for bankruptcy on Sunday. If Amazon had been allowed to acquire the company in 2022, consumers likely would have enjoyed improved quality and lower prices. Now, thanks to antitrust regulators, iRobot will be acquired by a massive Chinese robot vacuum manufacturer, Shenzhen Picea Robotics, instead of American-owned Amazon.”
“Carr, in other words, thinks it is entirely appropriate for federal regulators to demand “significant changes” in the way news organizations operate, including what they cover, how they cover it, the sources they interview, the people they invite to comment on current events, and the way they respond to complaints of bias. He is explicitly setting the FCC up as an arbiter of good journalism.
That power grab is consistent with Carr’s understanding of the government’s role in the marketplace of ideas, which he thinks should include restricting the editorial discretion of social media platforms in the name of “reining in Big Tech” and preventing “discrimination against core political viewpoints.” Carr, an avowed free speech champion, presents his concerns about broadcast news bias in similar terms, saying “a handful of national programmers” should not “control and dictate to the American what the narrative is, what they can say, what they can think.” As with his vendetta against “Big Tech,” he perversely portrays government interference with private editorial decisions as a victory for freedom of speech.
Contrary to that puzzling take, FCC oversight of broadcast journalism does not protect First Amendment rights; it undermines them. Such meddling would be obviously unconstitutional in the context of print, cable, satellite, streaming, or online journalism. For reasons that make less and less sense every day, broadcasting is treated differently, supposedly because government licensing and regulation are necessary to address “the scarcity of radio frequencies.””
“Congress established the FTC in 1914 to prevent unfair competition and deceptive business practices. This has primarily meant “protecting Americans in their role as consumers,” according to Ferguson. The FTC enforces the Clayton Antitrust Act, which outlawed price discrimination between customers, exclusive dealing, interlocking directorates, and mergers or acquisitions that “substantially reduce competition.”
But Khan was more interested in Americans’ role as producers than consumers. In 2022 she signed a memorandum of understanding (MOU) with the National Labor Relations Board to “protect workers against unfair methods of competition, unfair or deceptive acts or practices, and unfair labor practices,” such as restrictive contract provisions. In August 2023, Khan signed a similar MOU with the Department of Labor recognizing both agencies’ shared commitment to protecting workers from deceptive earnings claims, restrictive noncompete and nondisclosure contracts, and the “impact of labor market concentration.”
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Ferguson’s endorsement of the 2023 joint merger guidelines, along with his hostility to the tech industry and support for enforcing the anti–price discrimination Robinson-Patman Act, all suggest a continuation of Khan’s activist antitrust ideology. The Joint Labor Task Force is yet more evidence.”
“When the Justice Department successfully blocked a proposed merger between JetBlue and Spirit Airlines last year, the head of the antitrust division under President Joe Biden announced that it was “yet another victory” for American consumers.
The declaration may have been premature. After the deal fell apart, Spirit’s stock price cratered, and the company declared bankruptcy, fired hundreds of people and raised ticket prices. The company recently received court approval for a reorganization plan that will wipe out the company’s stockholders and hand control over to large bondholders led by hedge funds and asset managers.”
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“For decades, antitrust enforcement was guided by the notion that the effect on consumers should be regulators’ top priority. Biden’s antitrust enforcers rejected that approach — instead working from a relatively new, controversial and amorphous theory that, as Khan once described it, argues that antitrust law should instead focus on “workers, suppliers, innovators, and independent entrepreneurs” and try to dilute the economic and political power of large corporations. The unstated implication is that higher consumer prices may in fact be necessary and desirable to pursue these goals.”
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“What the last four years show is that despite the best efforts of Khan, Kanter and their ideological allies, antitrust enforcement does not deliver broad, effective and durable economic policymaking.
Litigation is inherently fraught, and courts are not reliable or predictable enough for it to work. There can also be radical regulatory swings between administrations — like the one we are witnessing now — that can slow or even wipe out your work.
A conceptually simpler way to improve things for working-class Americans from a liberal economic perspective is one of the oldest around — redistributive taxing and spending. The Democratic Party has for years avoided anything that might look like a tax hike for the middle class, but one of the most reliably well-polling ideas in American politics is raising taxes on corporations and the wealthy.”
“The FTC’s stated motivation for challenging the merger was to avoid “higher prices for groceries and other essential household items for millions of Americans.””
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“Kroger and Albertsons would still only account for 9 percent of overall grocery sales, as C. Jarrett Dieterle has noted in Reason, belying the FTC’s concerns that the merger would grant them significant market power. The FTC’s overly narrow definition of the grocery market is the actual cause of concern: The Commission’s definition includes traditional supermarkets and “hypermarkets” like Walmart and Target, but excludes Amazon and Costco, the second and third largest grocery retailers, respectively.
Considering Kroger’s and Albertsons’ single-digit shares of the properly defined market, and competition from other grocers not recognized by the FTC, the merger was more likely to save Albertsons from insolvency, not afford them enough market power to increase prices. Kroger and Albertsons projected the merger would create $500 million in cost savings—at least some of which would be passed onto consumers. The pair also planned to invest $1.3 billion to improve customer service, according to Nate Scherer, a policy analyst with the American Consumer Institute, a nonprofit research institute dedicated to the promotion of consumer welfare.”
“The Committee on Foreign Investment in the United States (CFIUS) was unable to reach a consensus on Japan’s Nippon Steel’s $15 billion acquisition of U.S. Steel. The very committee that is responsible for safeguarding the U.S. from compromising foreign investments doesn’t recommend blocking the merger”
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“CFIUS’s inability to recommend blocking the merger on national security grounds is not surprising: Japan is not an enemy of the U.S., but a close ally. The U.S. has been formally allied with Japan since the signing of the U.S.-Japan Security Treaty in 1951. In April, Biden and former Japanese Prime Minister Fumio Kishida issued a joint statement celebrating “a new era” of bilateral security cooperation and announcing “several new strategic initiatives to strengthen our defense and security cooperation [and] bolster economic security.”
A section of the joint statement details the two countries’ commitment to economic cooperation under the U.S.-Japan Competitiveness and Resilience (CoRe) Partnership, which the Biden administration announced in April 2021 to advance cooperation “on sensitive supply chains…and on the promotion and protection of critical technologies.” The statement also celebrates mutual investment, pointing to Microsoft’s $2.9 billion investment in AI and cloud infrastructure in Japan and Toyota’s $8 billion battery production investment in North Carolina—a mere 1 percent of Japan’s $800 billion in foreign direct investment in the U.S.
If mutual investment in critical industries like semiconductors and batteries doesn’t compromise national security, the burden of proof is on those opposing Japanese investment in American steel production to explain why it does. CFIUS could not meet this burden and refrained from issuing a recommendation accordingly.”
“Kroger is the fourth-largest grocery store chain in America—behind Walmart, Amazon, and Costco—and Albertsons is the fifth-largest. Once merged, the combined company would rise to third on the list. On the surface, this may seem to provide some support for the FTC’s position, but American shoppers would be wise to read the fine print.
In truth, if the deal were to proceed, a merged version of Kroger and Albertsons would still only make up 9 percent of overall grocery sales. To put this in further perspective, consider that Walmart—the nation’s largest grocery provider—would continue to operate more stores (including its Sam’s Club outlets) than a Kroger-Albertson combo and maintain grocery revenue that is more than twice that of the merged company.”
“Today, Amazon terminated its planned acquisition of iRobot, manufacturer of Roomba robot vacuums, as the companies saw “no path to regulatory approval.” iRobot then announced that it would be cutting nearly one-third of its work force.
While the companies blamed regulators in the European Union for the termination, meddlesome U.S. lawmakers played their own part in souring the deal.”
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“as the companies waited on regulators, iRobot was losing money: The company took out a $200 million bridge loan in July 2023 to tie it over until the deal closed (at which point Amazon lowered its offer to account for the new debt). With the deal scuttled, Amazon will now pay a $94 million termination fee, but iRobot expects to report an operating loss of as much as $285 million for 2023.
It’s worth wondering, then, if this is what lawmakers like Warren had in mind. The FTC letter worried the merger “could harm consumers and reduce competition and innovation in the home robotics market.” But without the merger, iRobot could very well face insolvency, and nearly one-third of its work force will lose their jobs—and considering the company is based in Massachusetts, a substantial number of them may very well be Warren’s constituents.”