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IUPUI has agreed to refund about $500,000 to more than 46,000 current and former students to avoid prosecution for alleged price-fixing at its bookstores.
"To learn that such activity might have occurred is unacceptable, and we are implementing a restitution plan immediately," Cheryl Sullivan, vice chancellor of external affairs for the campus in downtown Indianapolis, told the Indianapolis Star for a story Friday.
The alleged price fixing between IUPUI's bookstores and an unidentified bookstore covered an 18-month period that ended in December.
Officials at IUPUI discovered the possible price fixing during a routine audit in November and reported it to the U.S. Justice Department's Antitrust Division later that month, said Susan Rivas, an attorney for the Indianapolis law firm Ice Miller.
The Justice Department granted IUPUI conditional amnesty under a program that allows businesses and organizations that report antitrust activity and cooperate with the government's investigation to avoid fines or prosecution, Rivas said.
The bookstores allegedly eliminated a 10 percent discount on new health sciences textbooks and imposed a 2 percent price increase on all new textbooks.
Under the restitution plan, students enrolled in classes anytime from July 2001 through December 2002 will receive an average of less than $5 in credit or refunds. Some students will get as little as 24 cents; two will get the highest payment, $170.
And I think we call all breath a sigh of relief now that those students are getting their $5 back. Of course, it would have been interesting to see whether the DOJ would have actually pursued the matter, given that it amounted to a $5 per student "injury."
::: posted by Skip Oliva
at 11:28 PM | link
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Friday, May 23, 2003 :::
Politics: Addicted to Taxpayer Funds
If you thought campaign finance "reform" was bad, consider an even more appalling concept: Taxpayer-subsidized advertising against candidates and ballot initiatives. And more appallingly, this is being pushed by Republicans:
House Republicans are attempting to lift long-standing restrictions on a $1 billion anti-drug advertising program in a move that would allow the White House to use taxpayer funds to engage in partisan political activities and campaign against candidates or ballot measures favoring the legalization of drugs.
The provision was quietly tucked into a bill reauthorizing the White House Office of National Drug Control Policy and is set for markup today before the House Government Reform Committee.
Currently, the office and its director, who is commonly referred to as the drug czar, are barred by law from using their annual $195 million anti-drug advertising budget for partisan, political purposes.
Under language included in a reauthorization bill authored by Rep. Mark Souder (R-Ind.), the prohibition would be lifted when the ONDCP director is acting to oppose an attempt to legalize the use of any illegal drug. The measure was approved last week by the Government Reform subcommittee on criminal justice, drug policy and human resources.
As written, the provision would allow partisan radio, print and television ads if the purpose were to oppose the legalization of drug use. Critics said that any candidate or political party that adopts a position promoting such reforms as allowing the medical use of marijuana or reducing drug sentencing provisions could face a government-sponsored advertising campaign against them in the electoral battlefield.
Last year, for example, Rep. Barney Frank (D-Mass.) sponsored legislation that would limit federal intervention aimed at states or localities that adopted ballot measures less restrictive than current law in dealing with marijuana use. Under the eased advertising restrictions, the drug-control office could presumably use television ads against Frank, critics of the proposal said.
The impetus for this legislation, H.R. 2086, came from a controversy that developed in last year's elections, when White House Drug Czar John Walters openly used taxpayer funds to campaign against medical marijuana initiatives in Nevada and other states. The Marijuana Policy Project, a group supporting the initiatives, filed a federal ethics complaint against Walters earlier this year, charging him with violating the Hatch Act, which broadly prohibits officeholders from using their position and government resources to campaign in state elections. Last month, Nevada's attorney general formally rebuked Walters, but then held he lacked the authority to prosecute a federal official.
MPP's lobbying managed to postpone a committe vote on H.R. 2086, but that's not the end of the story. The legislation actually re-authorizes the Drug Czar's office itself, so it's likely to pass in some form. hopefully without the advertising provision. Ideally, of course, Congress would not vote to re-authorize the Drug Czar's office and the entire operation would pass into the night. There's simply no legitimate role for a government-funded lobbyist who goes around harassing states and citizens who so much as try to debate the issue of drug decrimininlization.
And if you want to extrapolate a larger theme, consider the Drug Czar's campaigning a warning sign for what will happen if the McCain-Feingold campaign finance bill is ultimately upheld by the Supreme Court. That bill restricts the First Amendment rights of citizens to engage in voluntary campaign activity. If the law survives, it will directly encourage further regulation in the form of taxpayer-financed campaigns. This means views not considered "mainstream" by government regulators will be shut out of the political process entirely.
::: posted by Skip Oliva
at 10:54 PM | link
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The Culture: You don't see that picture in the news
Rachel Corrie, the 23-year-old terrorist sympathizer from Olympia, Washington who was killed in an attempt to obstruct an Israeli bulldozer in March has become the new patron saint of Palestine, complete with internet shrines, the publishing of her e-mails to her family about her anti-Israeli activism and other such propaganda. Little Green Footballs reports on how Naomi Klein in the Toronto Globe and Mail has the audacity to compare Corrie with Private Jessica Lynch.
Trouble is, the deification of Corrie fails to account for this little picture.
Somehow, I doubt Jessica Lynch burned American flags while surrounded by children.
Corrie's own words damned her enough, but if this picture is accurate, it reveals an angry woman light-years apart from the sweet little activist her admirers belive her to be.
I take no glee in this story. I am saddened by this. Corrie could have worked for peace. She could have called for an end to terrorist attacks. She could have educated children that one's ethnic heritage does not define them. But instead, she did just the opposite.
What a waste.
::: posted by Nicholas Provenzo
at 4:51 PM | link
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Aetna Inc. Thursday broke ranks with other major health insurers, announcing a $470-million settlement of a suit filed by 700,000 doctors.
The physicians said the settlement would allow them greater flexibility in offering comprehensive care and make it easier to refer patients to specialists. They had charged Aetna with unfairly reducing payments and denying patients' coverage.
The eight other giant health insurers, however, said they would continue to fight the suit, filed in U.S. District Court in Miami by the doctors who joined together as a class last September.
Representatives for the doctors and Hartford, Conn.-based Aetna, the nation's third-largest health insurer, said physicians and patients covered by the insurer would soon have wider rights to appeal the company's decisions regarding payments and coverage. Doctors involved in the suit said the settlement must be signed by U.S. District Judge Federico Moreno in Miami before it becomes effective.
Now, some parts of this settlement rub me the wrong way, particularly the $20 million Aetna will pay to create a "foundation to focus on eliminating racial and ethnic disparities in health care." I mean, I can tell you how to do that for free—restore capitalism to the health care market. But overall, it's a good thing the physicians were able to get one major insurer to break ranks and settle. When you think about it, this settlement—which deals most with conduct rather than damages—amounts to a collective bargaining effort by the nation's physicians. This lawsuit probably would not even be necessary if the FTC and Justice Department would simply get out of the way and allow physicians to collectively negotiate with insurers in the first place. After all, it's a lot harder for an insurance company to screw physicians out of their contractual rights when they're able to respond with a group boycott. But under the almighty antitrust laws, the doctors' needs are secondary to the FTC's policy preference for maintaining the monospony power of insurance companies.
Still, the only long-term solution to the physicians' grievances is to put the government-sponsored HMO cartels out of business for good. This settlement is a good first step, but the doctors need to follow up, not just by maintaining their lawsuit against the remaining insurance companies, but by getting behind CAC's effort to exempt physicians from the antitrust laws.
::: posted by Skip Oliva
at 1:01 AM | link
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Wisconsin fitness centers can bar men or women from joining their clubs under a bill Gov. Jim Doyle signed Monday that exempts the gyms from the state's anti-discrimination laws.
Doyle said he hoped the legislation would encourage more people to exercise regularly, pointing out women lobbied for the bill because they said they felt more comfortable working out at a fitness center that caters only to them.
"Government should do everything we can to encourage physical fitness and if this bill can help encourage women to exercise by offering a supportive environment, then it deserves our support," Doyle said.
Wisconsin law prohibits discrimination in public accommodations based on sex, race, color, creed, disability, sexual orientation, national origin or ancestry.
The law creates a narrow exception for fitness centers.
It defines a fitness center as a place "that provides as its primary purpose services or facilities that are purported to assist patrons in physical exercise, in weight control, or in figure development."
Sen. Judy Robson, D-Beloit, opposed the bill, fearing someone could use the definition to justify a men-only golf course or similar venture.
She said the legislation opens the door to discrimination and creates the possibility it will spread to other public accommodations.
"Women have fought for years to end gender discrimination, especially in athletics," Robson said. "Now that we have arrived at almost full equality, this could set us back."
I'm not sure what's worse: Robson using a specious sex discrimination claim to argue against a bill women asked for, or Governor Doyle tying the constitutional right of free association to some government-approved cause like promoting "physical fitness."
::: posted by Skip Oliva
at 12:51 AM | link
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PORTLAND, Maine - A federal judge plans to rule next week on the proposed settlement of a music antitrust lawsuit that would put roughly $12.60 in the pockets of 3.5 million consumers.
Judge D. Brock Hornby heard testimony for more than three hours Thursday on the fairness of the agreement that calls for music distributors and retailers to pay $143 million in cash and compact disks.
Terms of the settlement call for checks to be mailed to 3.5 million people who filed claims under the class-action lawsuit. The actual amount depends on how much money goes to lawyers and distribution fees.
The payout would culminate an antitrust suit that was started by prosecutors in several states in 1996.
The lawsuit, signed by the attorneys general of 43 states and territories and consolidated in Portland in October 2000, accused major record labels and large music retailers facing competition from discount retailers like Target and Wal-Mart of conspiring to set minimum music prices.
The defendants — Sony Music Entertainment, EMI Music Distribution, Warner-Elektra-Atlantic Corp., Universal Music Group and Bertelsmann Music Group, as well as retailers Tower Records, Musicland Stores and Transworld Entertainment — deny any wrongdoing. Attorneys representing the companies declined to testify in court.
Of the total settlement amount, $75.7 million would be distributed in the form of 5.6 million music CDs sent to libraries and schools throughout the nation.
The proposed cash settlement in the case totals $67.3 million.The actual cash distributed to the public is expected to be around $44 million. Payments should be mailed out within weeks of the settlement's approval. The remaining cash will be eaten up by distribution costs and attorney fees.
This case is first and foremost about enriching attorneys. No serious person would argue consumers suffered a legal injury because they chose to buy a CD at a given price. Whether or not the record companies agreed to set minimum prices is irrelevant, since it's their product to sell in the first place. This settlement effectively grants consumers a government-coerced rebate.
The state attorneys general behind this case win on every front: they enrich their trial lawyer buddies, who in turn will support their future election campaigns; consumers get a warm fuzzy over the $12 and change they get for doing absolutely nothing; and a group of major companies lose a chunk of their hard-earned wealth, thus further eroding America's belief in capitalism as the proper basis of society. All in all, not a bad day's work if you're a parasitic state attorney general.
::: posted by Skip Oliva
at 12:43 AM | link
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The United States would be strengthened at home and abroad by a fresh emphasis on public service, Senator John F. Kerry said yesterday, as he outlined a citizenship program whose hallmark would be a free public-college education for anyone who spends two years as a volunteer.
The Democratic presidential contender, speaking first at an American Legion post and later at the prep school he attended, also proposed a federally mandated -- but locally designed -- requirement for public service by high schoolers; a ''Retired but not Tired'' work program for senior citizens; a ''Summer of Service'' program for teenagers not yet old enough to work; almost a quadrupling of the Peace Corps from 6,700 to 25,000 volunteers; and a recruitment drive led by the commander in chief to expand the ranks of the US military.
The Massachusetts senator accused President Bush of failing to quench a public thirst for service in the aftermath of the terrorist attacks of Sept. 11, 2001, and of not fulfilling his campaign promise to ''rally the armies of compassion.'' Kerry's program would cost an estimated $3.2 billion annually, which he said could be paid by closing more than $60 billion in corporate tax loopholes.
Taking money from corporations that earn it to subsidize volunteers who are leeching off the government. Sounds like a fine way to instill a sense of perpetual dependency in our young. As blogger Joanne Jacobs opined about Kerry's proposal: "I envision eager youths and cheerful seniors marching off to their work assignments, singing patriotic songs. Only they're singing in Russian, for some reason."
::: posted by Skip Oliva
at 8:00 PM | link
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Antitrust News: Pate Aces Confirmation Test
I'll have more to say later today on the confirmation hearing of R. Hewitt Pate, the soon-to-be permanent head of the DOJ's Antitrust Division. For now, here's the Washington Post's take:
R. Hewitt Pate yesterday moved closer to becoming the permanent chief of the Justice Department's antitrust division when he breezed through a Senate confirmation hearing.
Pate, 40, has been acting assistant attorney general for antitrust since November, when Charles A. James left the job. Pate is less of a lightning rod than James, whose handling of the government's settlement with Microsoft Corp. was criticized by some technology companies and members of Congress.
Pate was asked few controversial questions at yesterday's two-hour Judiciary Committee hearing. Senators repeatedly implored Pate to guard against a spate of media mergers and acquisitions after the Federal Communications Commission relaxes ownership rules in the industry, as it is expected to do next month.
"The antitrust division will stand as our last line of defense against excessive media concentration," said Sen. Herb Kohl (D-Wis.).
Pate stressed that the Justice Department, under the Sherman Antitrust Act, would narrowly review such deals for their potential economic impact on local markets, rather than for their effect on television and radio programming.
"I can certainly assure you we will be in place and if there are transactions that present anticompetitive problems we will stop them," Pate said. "When we step in, that may, as a byproduct, also preserve a diversity of voices and that's all for the good."
Sen. Arlen Specter (R-Pa.) pressed Pate to speed up an investigation of Orbitz LLC, which runs a discount travel Web site controlled by five major airlines. Three years ago, the antitrust division opened an investigation of Orbitz, citing a guarantee that airlines would offer their lowest fares on the site.
"Sounds to me on its face like a restraint of trade," Specter said.
Pate said upheaval in the airline industry and "the post-September 11 environment" complicated the antitrust review. "I can assure you we're not sitting on it," he said. "It's just as important to get the right result as to move quickly in those investigations."
Pate said the division will "continue to be vigilant" in making sure that Microsoft lives up to the terms of its settlement. He declined to discuss about other pending cases, including a review of a $6 billion deal that would give News Corp., one of the world's largest owners of television networks, control of Hughes Electronics Corp.'s DirecTV, the biggest U.S. satellite television service.
The Judiciary Committee could vote today on Pate's nomination. Sen. Orrin G. Hatch (R-Utah), the committee chairman, signaled that confirmation was not in question. "I'm totally in support of your nomination," Hatch said. "It's one of the best nominations we could possibly have."
::: posted by Skip Oliva
at 12:38 AM | link
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Wednesday, May 21, 2003 :::
The Culture: Danny Glover's Lethal Weapon
Maybe it's just me, but it seems that despite general approval of MCI's release of actor Danny Glover as their pitchman, more than one commentator I've read does not approve of the use of boycott to oppose an ideological foe. It's as if hitting a guy in his livelyhood is seen as just too much of a stab.
I don't think so. When we make public statements, our worlds often have an impact beyond ourselves. While every individual has a right to speak their mind free from government coercion, they do not have a right to public support for their statements. Glover, a long-time leftist and political activist, signed a statement in support of Cuba's communist dictatorship. For the victims of that dictatorship and those who sympathize with them, Glover's stance and his omnipresence as an MCI pitchman became intolerable. So they called on MCI to release him.
Where is the coercion? MCI could have stood firm, but instead decided that Glover's private statements offended the very people MCI sought to reach and diluted his effectiveness as a pitchman. Glover is still free to speak his mind, but now he has to recognize that his words come with a price.
Yet leave it to a leftist to demand the unearned as a matter of right.
::: posted by Nicholas Provenzo
at 12:51 PM | link
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Hewitt Pate, acting head of the Justice Department's antitrust division, says the new white-collar sentencing law means a price fixer previously eligible for a three-year sentence could now get 23 years if he is also convicted of obstructing justice. Pate says this should get the attention of potential corporate offenders: "Even very large fines imposed on corporations may be seen as a cost of doing business. Prison sentences are the single most effective deterrent."
Prison sentences will do nothing to deter antitrust violations, since no businessman actually knows what conduct will run afoul of the law. Under Mr. Pate's watch, the antitrust laws are violated if two businessmen in the same field merely exchange price information. Few Americans think such behavior warants one day in jail, much less 23 years.
But to be fair, Pate is not responsible for the new sentencing rules. You can thank a panicky post-Enron Congress for that.
::: posted by Skip Oliva
at 10:14 PM | link
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Antirust News: Verizon Wins a Round
In the fall, the U.S. Supreme Court will hear an antitrust appeal brought by telephone giant Verizon over a Second Circuit decision forcing the company to stand trial over antitrust charges brought by a competitor’s disgruntled customers. Today, >another antitrust case against Verizon went better for the company:
A divided federal appeals court on Tuesday upheld a judge's dismissal of Cavalier Telephone's $635 million antitrust lawsuit against Verizon Virginia.
Cavalier, a Richmond-based company that sells local telephone service in competition with Verizon, alleged that Verizon had engaged in anticompetitive conduct aimed at reducing or eliminating Cavalier's ability to reach customers and raising its costs of competing with Verizon.
U.S. District Judge James R. Spencer dismissed the lawsuit in March 2002, ruling that the conduct cited by Cavalier amounted to federal Telecommunications Act violations "dressed up in antitrust garb." The 1996 Telecommunications Act laid the groundwork for competition for local telephone service.
In a 2-1 ruling, a panel of the 4th U.S. Circuit Court of Appeals agreed with Spencer. Judge Paul V. Niemeyer wrote in the majority opinion that "Cavalier's recourse is to the procedures and remedies afforded by the Telecommunications Act, not to those afforded by the antitrust laws."
Judge Morton I. Greenberg, a member of the 3rd U.S. Circuit Court of Appeals who was called in to hear the case, dissented. He wrote that while he agreed with much of the majority's opinion, Cavalier stated a claim that warranted further court proceedings.
Cavalier had alleged that Verizon was violating various federal anti-monopoly laws and telecommunications regulations and had breached an interconnection agreement. The lawsuit also claimed violations of the state's Uniform Trade Secrets Act, interference with contracts and economic advantage, and intentional misrepresentation.
There is an underlying conflict between the 1996 Telecommunications Act and the antitrust laws, the result of Congress’ deliberate decision not to incorporate an antitrust exemption into the 1996 law. This has led to significant confusion among the federal courts on whether violating the 1996 law—which imposes a number of burdens on the “Baby Bells” to open their networks to competitors—can justify an antitrust claim. In 2000, the Seventh Circuit in Chicago dismissed an antitrust complaint against Ameritech, holding that the antitrust allegations were inseparable from the Telecommunications Act allegations, and that alone could not sustain the antitrust claim. This ruling was something of a judicial standard until the Second Circuit’s contradictory decision in the Verizon case now before the Supreme Court.
In one sense, it would actually be better if Verizon loses its Supreme Court case, because then Congress would be forced to deal with the mess it created. The antitrust establishment already recognizes the potential disaster that would result if telecommunications companies were subject to antitrust suits for alleged violations of the 1996 Act. The Federal Trade Commission, in fact, filed an amicus brief with the Supreme Court calling for the Second Circuit’s decision to be reversed, citing concern that the lower court’s precedent would “improperly trivialize the antitrust laws” by encouraging parties to “seek antitrust remedies for ordinary commercial and regulatory disputes.” This is an odd charge coming from an agency that routinely pursues trivial matters, such as the ethics codes of private honorary societies.
Of course, what the FTC really means to say is that only they should engage in such trivial pursuits; letting everyone in on the fun would simply paralyze our court system, and by extension our economy.
::: posted by Skip Oliva
at 10:07 PM | link
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The Courts: Eleven for Nine
Conservatives want to break up the U.S. Court of Appeals for the Ninth Circuit because they consider the judges too liberal as a group. But the real reason the Ninth Circuit should be split in two was demonstrated Monday when eleven judges of that court voted to rehear a case en banc and yet failed to produce a majority. They needed 12 judges to grant rehearing. Given the 9th Circuit's large size—28 active judges at full strength—and the accompanying caseload, it's simply bad jurisprudence to keep the entire court intact, because even in cases where there's significant momentum for rehearing en banc, the sheer number of judges required makes such a task impossible in all but the most obvious of matters (i.e., those where there's an unavoidable conflict between the circuit's opinions.)
At the same time, though, I also wonder whether it might be time to scrap the rule requiring a majority vote for rehearing en banc. After all, the U.S. Supreme Court only requires four justices out of nine to vote in favor of granting a petition for certiorari. Rehearing en banc, like certiorari, is a discretionary review process. The idea behind the Supreme Court's "Rule of Four" is that a substantial minority which questions the pervious decision should have the right to place cases on the Court's calendar with the intent of persuading at least one more justice to join them. An absolute rule of five would perclude much of the useful appellate review now provided by the Supreme Court. The same could be said of rehearing en banc petitions. If eleven judges in the Ninth Circuit thought the case was worth another look, chances are it was. You would rarely (if ever) get that many judges on the record in support of a wholly meritless appeal.
Turning to the case denied rehearing, Suzuki Motor Corporation v. Consumers Union, the eleven-judge dissent produced an opinion authored by Circuit Judge Alex Kozinski, whom CAC lauded last week for his excellent dissent from rehearing en banc in support of the Second Amendment. Kozinski goes 2-for-2 with today's dissent, which correctly seeks to dismiss a meritless—and potentially dangerous—product disparagement lawsuit brought against Consumer Reports by an unhappy auto manufacturer. The trial court granted summary judgment to Consumer Reports, finding no evidence of "actual malice," a key element to sustain a product disparagement claim. A 9th Circuit panel reversed the trial court last June and ordered the case tried. Judge Kozinski's Monday opinion dissents from the panel's decision:
KOZINSKI, Circuit Judge, with whom PREGERSON, REINHARDT, T.G. NELSON, HAWKINS, THOMAS, McKEOWN, WARDLAW, W. FLETCHER, FISHER and BERZON, Circuit Judges, join, dissenting from denial of rehearing en banc:
For over half a century, Consumers Union has been testing and rating consumer products and publishing the results in its magazine, Consumer Reports. A significant portion of the American public relies on CU’s ratings on a regular basis, and almost everyone consults Consumer Reports now and then before making a significant purchase—whether a sound system, a dishwasher or a car. What makes CU’s ratings particularly useful is the thorough explanation of the testing procedures employed, which lets consumers judge whether the ratings fairly represent the product.
The Suzuki Samurai article, the subject of this lawsuit, is no exception. Running some 6500 words, it tells readers precisely how CU came to conclude that “The Suzuki rolls over too easily,” starting with an incident during the vehicle’s break-in period where the Samurai “flopped over on its side” during a low-speed maneuver. The explanation is not written for morons; like other CU reviews, it is geared to an intelligent, informed consumer. Yet the careful reader will not fail to understand the central facts that undergird Suzuki’s claim in this lawsuit, namely, that the Samurai did well on CU’s standard course, that CU then modified the course to make it more challenging and, as a result, the Samurai did far worse than its competitors.
I find it incomprehensible that a review truthfully disclosing all this information could be deemed malicious under New York Times Co. v. Sullivan, 376 U.S. 254 (1964). If CU can be forced to go to trial after this thorough and candid disclosure of its methods, this is the death of consumer ratings: It will be impossible to issue a meaningful consumer review that a band of determined lawyers can’t pick apart in front of a jury. The ultimate losers will be American consumers denied access to independent information about the safety and usefulness of products they buy with their hard-earned dollars. The majority sets a dangerous precedent, and the full court errs grievously by failing to take the case en banc to correct the error.
Taking Judge Kozinski's warning a step further, just imagine the potential lawsuits for reviewers and critics of all types if they were subject to "disparagement" lawsuits: an angry film executive sues Roger Ebert for giving her film a "thumbs down"; a restaurant owner files a defemation claim against a magazine reviewer who didn't like the fish; or, to take a real life example, a talk show host gets sued for doing a show on the potential dangers of tainted beef. The reason the law requires "actual malice" is to separate basic acts of free speech from actual torts. The courts must vigorously defend objective standards against efforts to water them down, rather than simply letting things proceed to trial in the hopes the jury will figure it out.
Eugene Volokh, a former clerk for Judge Kozinski, discusses the substance of this case and Kozinski's dissent in this excellent post
::: posted by Skip Oliva
at 12:28 AM | link
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The Department of Justice today said that it cleared a proposal by Texas-based BroChem Marketing Inc. (BroChem) to establish a computer database aimed at giving chemical distributors efficient access to the information they need when marketing chemicals sold to them by chemical producers. The Department approved the proposal after BroChem agreed to make substantial modifications to address the Department's competitive concerns.
"The database could produce procompetitive efficiencies by making it easier for chemical distributors to access information and eliminating a large percentage of time-consuming, costly telephonic communications between chemical producers and distributors," said R. Hewitt Pate, Acting Assistant Attorney General for the Antitrust Division.
The Department's position was stated in a business review letter from Pate to counsel for BroChem.
According to the Department's business review letter, BroChem modified its original proposal by agreeing to establish computer safeguards to ensure that price-sensitive information is not accessible to competitors or others who should not have access to it. In addition, BroChem modified its proposal to ensure that the database will not include information added by BroChem that could facilitate price coordination.
In other words, it's okay to have a database so customers can access price information, so long as producers can't learn the prices their competitors are charging. Now in the real world, exchanging information is not a crime. But in the world of antitrust, anything that could be used as a "restraint of trade" is presumed illegal.
Here's another way to look at it: If I download information off the Internet on how to build a bomb, that's legal so long as I don't act upon that information and actually build a bomb. But if I'm a chemical manufacturer, I'm banned from even asking my competitor what he charges for his product, even if I never act upon that information. In the DOJ's mind, there's no divorcing thought from action, and mere acts of speech are considered overt acts for purposes of labelling behavior legal or illegal.
The other interesting thing about this story is that the DOJ actually reviews business practices in advance. According to the DOJ: "Under the Department's business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Division would challenge the action under the antitrust laws." Well isn't that a wonderful policy? Again, in the real world, prior restraints of this kind are frowned upon, if not outright forbidden. But in the antitrust world, businessmen may act only by government permission.
Incidentally, "Acting" Assistant Attorney General Pate has been nominated to take over the Antitrust Division permanently. The Senate Judiciary Committee is holding a prefunctory confirmation hearing this Wednesday morning. at 10 a.m. I plan on attending, so if you're in the neighborhood of the Dirksen Senate Office Building, stop by and say hello.
::: posted by Skip Oliva
at 11:50 PM | link
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Foreign Policy: A Coalition of the (Constitutionally) Unwilling
The announcement represented an about-face for the administration, which said in March it could not accept several key provisions of the draft accord related to packaging, labeling, advertising and sales, among other things.
Formally called the Framework Convention on Tobacco Control, the world's first treaty on health seeks to tackle the consequences of tobacco use with measures ranging from a halt in advertising to a crackdown on smuggling and a ban on cigarette sales to minors.
The United States, along with Germany, had opposed a clause to ban advertising, saying it would violate constitutional guarantees to free speech.
Asked whether he would push for any changes to the pact, [HHS Secretary Tommy] Thompson said, "No, we're not going to seek any changes or any reservations."
Interestingly, Secretary Thompson never said his initial constitutional reservations were unjustified, only that the U.S. wouldn't press the issue for the sake of preserving the treaty. The message I take from that is that the Bush administration is putting international popularity ahead of constitutional principle. That's an interesting reversal from the administration's war policy.
Ironically, this also sounds like the peer pressure argument that teenagers use to get their friends to smoke: You know it's wrong, but everyone else is doing it, so why don't you give it a try?
::: posted by Skip Oliva
at 7:15 PM | link
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Foreign Policy: Zionism and Racism
Yesterday in Washington, a group of self-proclaimed Jewish and Christian Zionists held a "leadership summit" to discuss the state of the Israeli-Palestinian situation. Several speakers commented on the source of Israel's legitimacy:
Gary Bauer, president of American Values and a Republican presidential contender in 2000, declared, "The land of Israel was originally owned by God. Since He was the owner, only He could give it away. And He gave it to the Jewish people."
Calling the peace proposal "a Satanic road map," Earl Cox, executive producer and host of Front Page Jerusalem, a radio program, asked, "Do any of you believe [Palestinian leader] Yasser Arafat will embrace traditional family values? There will be a mosque on all the holy sites. How can anyone who's a Jew or a Christian support such a proposal?"
The sad thing about this is Israel doesn't need to resort to mysticism to defend its right to exist. It certainly can do without the overt bigotry. The Israelis have done a remarkable job over the sixty-plus years taking a barren wasteland and converting it into a modern state that lives according to quasi-Western values (there is still that slight problem separating synagogue and state.) Folks like Bauer do an enormous disservice by, in effect, dismissing Israel's right to exist as nothing more than shifty prophecy. The Bible is certainly a great and important cultural work of mankind, but it is not a land deed. And if mainstream Israeli society chooses to defends its right to exist on grounds of "God says it's ours," then the Palestinians will have been given an opening, however unearned, to seize the moral high ground.
::: posted by Skip Oliva
at 7:02 PM | link
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The U.S. Supreme Court has rejected an appeal by SBC Communications Inc. involving a $20 million judgment for violation of Oklahoma's antitrust laws, according to a Dow Jones news report.
SBC subsidiary Southwestern Bell Telephone Co. was sued by several smaller pay phone companies under Oklahoma's antitrust laws. The companies alleged that SBC had locked up the local pay phone market by reaching restrictive contracts with the owners of the pay phone locations.
SBC spokesman Walt Sharp says the telecommunications giant continues to believe that it did nothing wrong.
"SBC continues to believe that we have acted properly in all matters related to payphone competition in Oklahoma and everywhere else in our region of coverage," Sharp says. "We have complied with the terms of the judgment (in January) and it has been settled."
The 10th U.S. Circuit Court of Appeals in Denver denied SBC's appeal of the judgment last year.
You have to love the fake horror at the core of antitrust cases like this one. What I mean is this: Were SBC's competitors legitimately surprised that their opponent would actually seek contracts to restrict their entry into the market? If they were in SBC's position, they would have done precisely the same thing.
::: posted by Skip Oliva
at 6:47 PM | link
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Rights & Reason: Kentucky Bar Rewrites Ad Rules
Law.com reports on new regulations the Kentucky Bar seeks to impose on attorney advertising.
Since the Supreme Court ruled in 1977 that outright bans on lawyer advertising are unconstitutional, every state has grappled with what lawyers may say about themselves.
The high court allows restraint on ads that are false, deceptive or misleading. Bates v. State Bar of Arizona, 433 U.S. 350 (1977).
The proposed regulations "attempt to implement the Kentucky Supreme Court's rules by defining 'false, misleading and deceptive,'" said Benjamin Cowgill, chief counsel for the Kentucky Bar Association.
One regulation, for example, says that if an ad speaks to monetary recovery it "must include an appropriate explanation of the legal requirements" to win and must say "that recovery may be dependent on the ability to collect from the responsible party."
The dispute, however, is not just about what kinds of commercial speech can be proscribed under the First Amendment. The real flap is about an 11-year-old rule that some attorneys say amounts to an illegal prior restraint of commercial speech.
Since 1992, the Kentucky Supreme Court has required lawyers to submit certain kinds of advertising for pre-approval to the Bar's Attorney Advertising Commission.
"That's prior restraint," said Lucian Pera, an attorney who represents Louisville, Ky.'s Becker Law Office. "And that's unconstitutional."
I think the Kentucky Bar is committing more then just prior restraint. It is placing attorney advertising in the same regulatory ghetto that the commercial speech doctrine places regular commercial advertising. Why is it that speech that advances one's political interests is protected by the First Amendment, but speech that advances one's economic interests is not?
I think the real question ought to be, "where is the victim and how was he harmed." Fraud statues alone provide actual victims with protection and redress from false or exaggerated claims. Rather than create paternalistic regulations that assume idiocy on the part of common man, bar associations ought to instead acknowledge that the courts are more than able to protect the people from errant lawyers. Instead of acting like advertising czars, bar associations would be better off instilling in their members an appreciation for the principle of individual rights.
::: posted by Nicholas Provenzo
at 5:13 PM | link
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Rights & Reason: Virginia's Latest Threat to Reproductive Rights
George Mason University student and GMU Objectivist Club member Jim Woods dissects the latest attack on reproductive rights to come out of Virginia at Initium.
::: posted by Nicholas Provenzo
at 11:31 AM | link
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Sunday, May 18, 2003 :::
Foreign Policy: Race and Iraq
Muhammad Al-Shibani, in his May 16th ArabNews.com article "Iraq War: The Agenda Is No Longer Hidden", writes that "Arab governments and peoples are united in their abilities to forget. They have forgotten and abandoned a major Arab country which has now fallen under foreign occupation."
Never mind the ambiguity left in the rest of the article as to how exactly "they" have forgotten and abandoned Iraq (didn't Arab News run a number of articles before on aid such as medical assistance to Iraqis that the Saudi government was implementing?) Instead Al-Shibani automatically disapproves of American troops just for being "foreign" and makes an implicit call for loyalty along racial lines. Is race primary criteria to judge an occupying force? Is a ruthless tyrant of one's own race better than a freedom-promoting foreign army? Al-Shibani seems to think so.
The proper criteria to judge an occupying force or permanent government structure is not by the pigment of their skin, but by how fully and consistently the rulers respect and protect individual rights. Perhaps Al-Shibani and others who entertain similar racist thinking might want to compare the US-led coalition occupation with the growing body of knowledge of the horrors that their Iraqi "Arab brethren" in power committed against their other "Arab brethren" in subjugation.
To be fair though, thinking along racial lines is nothing peculiar to Arabs in the Middle East, but instead is a problem of global proportions and includes the thinking of many Americans. Where race continues to trump merit in hiring practices and university admission as mandated by the government, then individual rights are violated.
Perhaps both Arabs and Americans should abandon racial favoritism, and instead recognize the universal applicability of individual rights, regardless of the racial composition of those who first formulated or now implement these rights.
::: posted by Renee Messier
at 12:09 PM | link
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