The U.K. Competition Authority ‘Wins,’ but Consumers Lose

“Competition regulators around the world are attacking some of the most successful and innovative entrepreneurs in the world—American companies. Strangely, they can’t seem to agree on what markets these companies are “monopolizing” or what they have done wrong. And regulators sometimes contradict each other with their complaints.
The most recent example of this behavior comes from the United Kingdom’s Competition and Markets Authority. It decided to force Meta, the parent company of Facebook, to sell GIPHY—a popular tool that makes short, animated and looped videos (GIFs) that users love to share in their social media posts—to an “approved buyer.”

But were U.K. consumers harmed by the previous integration of this service? And will they be better off when a different, likely also large, company owns a mostly free online tool that people use for fun on social media?

The short answers are no and no. Much like the dog that finally catches the car, this “win” for proponents of breaking up American tech businesses will actually be a loss for the consumers they’re supposed to protect. The U.K. decision will hurt the biggest benefactors of the GIPHY-Meta merger: creators and users. And because of the nature of many internet services, it is unlikely the impact will only be felt in the U.K.”

“So how does a Meta-GIPHY acquisition actually help consumers? It’s easy to think of it just as a fun way to drop Real Housewives into your text banter with friends or to show your fandom for a favorite sports team or artist. Users benefit from the ease of inserting these fun graphics through a service like GIPHY rather than having to create them on their own. Still, there are other GIF generators users could reach for, and they typically do when they can’t find what they want on GIPHY.

Social media users, however, are not GIPHY’s only consumers. Brands, creators, and artists use GIPHY to design digital products that increase the awareness of their brands. Since most of GIPHY is free, that allows folks to do so at a very low cost. Still, these same creators have many other options when it comes to how to gain similar awareness, such as Snap filters or Instagram stickers. And this current model has resulted in minimal costs for its clients.

However, with a new company purchasing the service, or if it is forced to go independent, GIPHY’s revenue model could completely change. Instead, GIPHY’s new owner could seek a pay-per-use each time a person posts a GIF or charge a subscription fee to users. Even if the pricing model doesn’t change, creators of sponsored content that supports GIPHY might not find as much value in a new owner or a less integrated service. They might then spend their resources elsewhere, leaving GIPHY to languish.

Given the lack of clear harm from a Meta-GIPHY merger, why did the U.K. decide to intervene? U.K. regulators feared that Meta was getting too big, and they wanted their “approved buyers” to own it instead. This “big is bad” rhetoric is especially ironic given that Meta is not the behemoth it once was.”

“There is a concerning, deeper message here, and in actions like the FTC’s decision to challenge Meta’s acquisition of Within, that is alarming for the future of free markets, innovation, and business. Regulators are telling successful American companies not to innovate without permission, and that even if an acquisition benefits consumers, it still may not be approved.”

“Do we want consumers to pick winners and losers in the marketplace, or do we want to permit politicians to prop up the companies they like, at the expense of American businesses?”

New prime minister, same old battles over Brexit

“A former Liberal Democrat and Remain supporter, she fully embraced Brexit after the 2016 referendum, becoming one of its most ardent backers. As foreign secretary in Johnson’s government, she shored up her Brexit credentials with her confrontational stance toward the European Union.
Her reinvention allowed her to ascend to the top of her party, and now the premiership. That rise says a lot about where the UK’s Conservative Party (or Tory party) is right now: Even though the UK officially broke with Europe, Brexit has also ballooned into an entrenched domestic political and culture war issue. Truss is the embodiment of this, which also says a lot about how she may lead — when it comes to the European Union, and beyond.”

“Johnson ultimately negotiated a Brexit deal that would mean some goods from the United Kingdom bound for Northern Ireland would have to undergo checks before they arrived there, over concerns they might end up in the EU single market. That is a source of tensions for unionists in Northern Ireland (who don’t want much distance between Northern Ireland and the rest of the UK) and for the Conservative government, who say the deal is creating this divide and complicating commerce within the country.

But the EU says the UK isn’t implementing the deal as agreed, and has launched legal proceedings to get them to comply. The UK, meanwhile, with this Northern Ireland Protocol Bill, is threatening to tear up the entire agreement. Truss has also threatened to trigger a formal mechanism within the Brexit deal that can be invoked when “serious economic, societal or environmental difficulties that are liable to persist” come up — something the EU will be forced to respond to, if that happens.”

“The EU has said it’s willing to talk, but within the framework of original protocol; the UK has indicated it wants more radical changes.”

London Libel Lawsuits Punish Truth Tellers

“In the U.K., defamation plaintiffs have two major advantages that Trump envies. First, they do not have to prove that an allegedly defamatory statement was false. Second, they do not have to show that the defendant deliberately or recklessly misrepresented the facts—the “actual malice” standard that the U.S. Supreme Court has said the First Amendment requires in libel actions brought by public figures.

Instead, the target of a British defamation lawsuit has the burden of establishing that he is protected by one of several recognized defenses. If he settles on a “defense of truth,” he has to show it is more likely than not that “the imputation conveyed by the statement” was “substantially true.” That plaintiff-friendly rule has made the U.K. a magnet for libel actions by prominent people whose claims might get a less receptive hearing in other countries, including American cyclist Lance Armstrong, Swedish businessman Svante Kumlin, and Russian tycoon Boris Berezovsky.”

How to watch the Tory leadership contest like a pro

“An almost endless procession of scandals have chipped away at Johnson’s authority since he won that historic majority of 80 seats in the 2019 general election — from his disastrous handling of the early phase of the COVID-19 pandemic, to revelations about dodgy deals funding luxury renovations to his Downing Street flat. The rot really started to set in with a series of stories about boozy parties held in No. 10, including some attended by the prime minister himself, in breach of pandemic lockdown rules.

Last month Johnson narrowly survived a leadership challenge. Some 41 percent of Tories voted to remove him. He went on to lead his party to two more disastrous by-election defeats, triggering the party chairman to resign.

In recent days, Johnson’s mishandling of sexual assault allegations against the former Tory Deputy Chief Whip Chris Pincher proved too much for many of his colleagues. The PM’s story kept changing, and loyal ministers found themselves inadvertently misleading the public by repeating inaccurate Downing Street lines on the scandal.

On Tuesday night, just two minutes after Johnson apologized for his mistakes, Sajid Javid quit as health secretary. Nine minutes after that, Chancellor Rishi Sunak, the second most powerful figure in government, resigned. Their double bombshell burst the dam and a deluge of other ministers quit in the hours that followed.”

“Johnson is aiming to stay on as a caretaker prime minister, while the Conservative Party holds an election for a replacement – a process likely to take up most of the next two months.

But there are growing signs that his internal party critics want him gone immediately.”

How Northern Ireland is complicating Biden’s European agenda

“Brexit happened, and the United Kingdom formally left the European Union. But the UK and EU are still arguing over the deal they both signed on the status of Northern Ireland.

When the United Kingdom voted to leave the European Union in 2016, it created the tricky issue of what to do about the land border between Northern Ireland (which is part of the UK) and the Republic of Ireland (which is an independent country and part of the EU).

It is no ordinary border. During the decades of bloody sectarian conflict in Northern Ireland known as the Troubles, that border was heavily militarized, and it served as both a symbol of the strife and a very real target for nationalist paramilitary groups.

A critical part of the Good Friday Agreement, the 1998 peace process that ended the Troubles, involved increasing cooperation between Northern Ireland and Ireland. That meant softening the border between the two. As a result, the 310-mile border is practically invisible and completely free from checks and physical infrastructure today.

But once the UK and EU split up, that would become the only land border between the UK and Europe. And with the two sides following different trade rules (that was one of the main points of Brexit), there would need to be some kind of checks put back in place to regulate the goods crossing the border.

So you see the problem: Not having any checkpoints or physical border is seen as critical to maintaining the peace. But the UK’s departure from the EU (and its trading rules) made some sort of customs check necessary.

The UK and the EU ultimately coalesced around a plan that carved out a special status for Northern Ireland. It would leave with the UK but follow many of the EU’s rules, thus keeping that land border open. To achieve this, certain goods coming into Northern Ireland from the rest of Great Britain would require checks, just in case they ended up in the EU’s single market. This put a customs border in the Irish Sea — effectively, within the UK.”

“In March, a set of grace periods expired for some provisions, and at the time, the UK just unilaterally extended those deadlines. The EU reminded the UK that, this being a treaty and all, the UK couldn’t just act alone, and so sued them for breaking international law.

Now another set of grace periods is expiring at the end of the month, including a provision related to chilled meats, such as sausages. The UK now needs to start conducting regulatory checks on any chilled meats coming into Northern Ireland from the rest of Great Britain. If the UK doesn’t do them, it would effectively prevent Great Britain from selling its own sausages in Northern Ireland, since those, in theory, might be at risk of entering Ireland, which could mean illicit sausages in the EU single market.

The sausage dilemma is really just the latest fracture between the EU and UK. The EU thinks Boris Johnson’s government isn’t an honest broker and is likely to renege on the protocol once again.

“It’s not about sausages per se, it really is about the fact that an agreement had been entered into, not too long ago,” Irish Taoiseach (prime minister) Micheál Martin said. “If there’s consistent, unilateral deviation from that agreement, that clearly undermines the broader relationship between the European Union and the United Kingdom, which is in nobody’s interest.”

Johnson, meanwhile, says he’s defending the territorial and economic integrity of the UK. His government has accused the EU of failing to do anything to minimize the trade frictions, which may leave them no choice but to get rid of the deal entirely. The problem, of course, is that Johnson himself signed up to the rules that he no longer seems to like very much.”

“the protocol has revived tensions in Northern Ireland itself, specifically among the unionist community in Northern Ireland.

The unionists reject any division between Northern Ireland and the rest of the UK (i.e., they support the union between Great Britain and Northern Ireland), and some feel, not totally incorrectly, that they were shunted aside in the Brexit deal. Some unionists are urging the UK to scrap the deal entirely. Northern Ireland saw unrest back in the spring, and there are fears over renewed violence, especially as “marching season” reaches its peak on July 12, when loyalists — extreme unionists — engage in parades and demonstrations.”

“The “sausage wars” may sound silly, but Biden will struggle to create this coalition of democracies to serve as a counterweight to authoritarianism if the EU-UK divorce keeps getting in the way. And it’s just a lot harder to sell the vision that the US and its partners are the ones to trust over China when key members of that group are backing out of agreements or engaging in a trade war.”

Britain Is Granting Record Numbers of Passports to Hongkongers. America Should Take a Hint.

“China has criticized Britain for opening its doors in this way, but the U.K. deserves praise for acting quickly and decisively in defense of freedom. Bloomberg’s reporting certainly suggests that demand is surging for this escape route.

It is shameful that America has not stepped up to do something similar.

Hongkongers currently have few options for coming to America. They can seek political asylum in the United States—and an executive order signed by President Donald Trump in July does reserve more spots on the refugee list for people fleeing Hong Kong—but to claim asylum one must be physically present in the United States. That, in turn, requires having another type of visa in order to get on a plane across the Pacific. Meanwhile, the Trump administration has slashed the number of political refugees the country will accept: just 15,000 during the current fiscal year, down from 85,000 in 2016.

Britain issued nearly four times as many BNOs to Hongkongers in October as the number of refugees America will accept from the entire world this year.

What could America do instead? Some members of Congress have proposed a bill to automatically grant asylum to any resident of Hong Kong who arrives in the United States and to exempt those numbers from the official refugee counts set by the White House. A more robust idea, proposed by Matt Yglesias in May, would be to grant a special visa allowing Hongkongers to settle in American counties where the population is shrinking, with permanent residency granted after five years.”

Rare win for Boris Johnson — but Brexit storm hasn’t passed

“In the very short term, however, it looks like plain sailing for Johnson. The deal, which will be subject to a ratification vote in the U.K. parliament on December 30, is highly likely to pass.

Some Conservative MPs, who have said they will study the deal in depth over the coming days, may quibble over details, but the overall shape of the agreement is — and has been for some time — one that represents a fundamental victory for Brexiteers. The U.K. will leave the EU’s single market and customs union. It will continue to manage its economy under rules similar to those in the EU, but if it wants to change those rules in the future, it has the freedom to (with consequences in the shape of tariffs).

Even on the totemic issue of fisheries, where the U.K. gave ground in the latter stages of the talks, none but the most purist Brexiteer could claim that the final settlement (a five-and-a-half-year transition period to a situation where the U.K. is free to decide who accesses its fishing waters) is not a major change from the status quo.”

“Johnson’s claim during his announcement that there will be “no non-tariff barriers” to trade is not correct. The deal removes tariffs and quotas. It doesn’t remove mountains of new paperwork for firms looking to trade with the EU, as the government’s own copious sets of instructions for businesses testifies.”

The last-gasp Brexit deal negotiations, explained

“The United Kingdom and the European Union have been trying for the last 11 months to negotiate an agreement that will define their future partnership after the UK formally left the bloc in January. But both sides remain stuck on major points — fishing rights, guaranteeing a “level playing field” on government subsidies and regulations, and how to enforce any deal — with very, very little time before the year-end deadline.

Getting a deal is in the interests of both sides, but reaching, ratifying, and implementing any deal in three weeks is going to be a challenge — and might not be feasible at this late stage.

But without any framework, the EU and the UK could face major disruptions in January on everything from trade to transport. It will be painful for both sides, but the UK, now all alone, is expected to feel that fallout more acutely, which will pile on to economic hurt brought on by the pandemic.”