Category: reason

Does anyone truly believe that our government—which consistently creates monopoly privileges for companies with its own cronyism—can be trusted to ensure that private markets remain competitive? Apparently so. Consider the resurgence of antitrust efforts against “Big Tech.” If history is our guide, going after disfavored companies will result in less competition, not more, along with fewer choices and higher prices for you and me.

Take the American Innovation and Choice Online Act recently approved by a Senate panel. This bill would block a handful of tech companies like Amazon and Apple from favoring their own products and services over those of competitors who also use these platforms. For instance, independent merchants who sell on Amazon claim to be punished if they sell their products for less on their own websites or on other sites like Walmart’s or Target’s.

The theory is that Amazon controls what happens on marketplaces across the internet, and in doing so, it makes products more expensive for everyone. The preferred solution seems simple: stop a few specific big techs from engaging in this practice.

While there is no empirical evidence to this claim, it’s a mistake to assume that government must (and can) prevent it. Along with other antitrust actions now being considered by Congress and federal agencies, it presupposes that politicians, bureaucrats, and courts possess a deep understanding of each platform and how it will react to a regulation. But the enormous complexity and dynamism of e-commerce should instead guide government officials toward humility.

The wannabe perfectors of Amazon or Apple don’t offer a good explanation for why so many sellers, customers, and platforms all continue to use the current practices. Aren’t they at least curious why new corners of the digital economy continue to emerge with these practices in place? Have they considered that if practices are failing to satisfy consumers, there are huge profit opportunities for new innovators to break the mold?

In “10 Things the American Innovation and Choice Online Act Gets Wrong,” legal scholar Dirk Auer examines the allegedly problematic “closed platforms” like those under Congress’ microscope versus “open” platforms” that legislators favor. “If recent commentary is to be believed,” he wrote, “it is the latter that should succeed.” And if consumers and platforms were to gain most from choosing the open platforms, “then we should see intermediaries step into that breach. But this does not seem to be happening in the digital economy.”

In other words, if government succeeds in “reforming” Amazon, it will deny sellers and consumers a service they’re truly choosing. Legislators have no business questioning this choice and eliminating it would push people toward platforms they find less useful. Currently, customers enjoy the ability to choose between both Amazon’s and independent retailers’ products in one place.

Writing for Regulation, Thomas Lenard explains that, thanks to this act, “Amazon might have to choose between its third-party platform business and its Amazon-branded business. Either way, prices would be higher, choices fewer, and consumers would lose. So, likely, would many small companies that built their businesses on the Amazon platform.”

But for all the talk of protecting consumers, antitrust cases are rarely about that. Long before becoming famous for his failed nomination to the U.S. Supreme Court, Robert Bork won plaudits for his 1978 book, The Antitrust Paradox. Bork demonstrated that during the first 80 years of its existence, antitrust was used to stifle competition and protect powerful incumbent firms from innovative and often smaller rivals.

Research done since then reveals that the original goal of the 1890 Sherman Antitrust Act (and subsequent statutes) wasn’t competition in the first place. The real goal was to protect politically powerful producers from market competition.

If Sen. John Sherman—after whom Congress’s first antitrust act is named—were really a friend of competition, he wouldn’t have staunchly supported the McKinley Tariff, which Congress passed a mere three months later. It was one of the largest tariff hikes in U.S. history and was meant to insulate powerful businesses from their rivals.

And so it goes today. Those who demand a revival of antitrust regulation to “promote competition” may not realize that they’re inciting a revival of cronyism to suppress competition.

COPYRIGHT 2022 CREATORS.COM

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The District of Columbia plans to suspend a burger joint’s liquor license because it has been refusing to check its customers’ vaccination papers.

In a closed executive session yesterday, the city’s Alcohol Beverage Control (ABC) Board voted to refer the restaurant, known as The Big Board, to D.C.’s Office of the Attorney General to draft a summary suspension notice. That’s the first step in suspending a liquor license.

BREAKING – The @DCGov_ABRA ABC Board voted to issue a summary suspension to @thebigboarddc.

The DC Office of Attorney General (@AGKarlRacine) still may need to draft & issue a notice, to be signed by the Board chair, and then served on the bar before the suspension is effected.

— Barred in DC (@BarredinDC) January 27, 2022

Under a public health order issued by Mayor Muriel Bowser, patrons of restaurants and bars had to have at least one shot in order to dine inside after January 15. (Come February 15, they’ll need to be fully vaccinated.) The Big Board issued a tweet on January 13 that implied it would not be enforcing the order: “As has always been the case for us, everyone is welcome. This rule applies yesterday, today and tomorrow. Hopefully we’ll see you January 16th.”

In addition to checking for proof of vaccination, businesses must also display signs explaining the new restrictions. The city also requires staff and customers to wear masks.

The Big Board had already received several warnings from the city about its staff not wearing masks, according to D.C.’s Alcohol Beverage Regulation Administration (ABRA).

On January 18, ABRA fined the business $1,000 for having unmasked staffers. It received another $1,000 fine two days later for failing to check customers’ vaccination status.

On January 22, the restaurant’s case was referred to the ABC Board. According to an ABRA case report, one of the agency’s inspectors visited the business at around 9 p.m. that night, where he found a number of violations, including staff not wearing masks and not checking customers’ vaccination status.

Both city police and the director of the Mayor’s Office of Nightlife and Culture also visited the bar that night and talked with its owner, Eric Flannery. Earlier that day, The Big Board tweeted that nothing had changed and “all are welcome.” (I have reached out to both The Big Board and Flannery for comment but have received no reply.)

The restaurant’s struggles with the city over its vaccine mandate have earned it a passionate crowd of supporters. The day after it was issued its first fine, Daily Caller reporter Henry Rodgers launched a GoFundMe to support the bar. So far, it has raised $15,000. People have claimed on Twitter that the business has had a rush of supportive customers too, with lines stretching out the door.

I patronized the restaurant myself the weekend that the city’s vaccine mandate went into effect. Despite all the controversy, the experience of actually eating there was unremarkable: I walked in, an unmasked waiter directed me to a table, I ordered, I ate, and I left. The only time someone asked me for identification was when I ordered a beer. Similar scenes play out across the vast majority of the country every day, where governments haven’t opted to make vaccination a requirement of going out in public.

Many other D.C. businesses are quietly ignoring, or only half-heartedly enforcing, Bowser’s vaccine order. (Miraculously, the number of new COVID-19 cases in the city continues to collapse.)

The difference here is that The Big Board drew attention to its noncompliance and is being punished for it.

DCist reports that the city’s Attorney General will draft a suspension order for Big Board’s liquor license, which will then be signed by the chair of the ABC Board and then served to the business. The Big Board can request a hearing on its suspension, which could happen sometime next week.

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Are employee dress codes illegal? That’s the implication in a consolidated complaint filed against Whole Foods Market by the National Labor Relations Board (NLRB).

The NLRB argues that it’s illegal for Whole Foods to say that grocery store staff can’t wear Black Lives Matter (BLM) paraphernalia at work.

To force Whole Foods to let staff wear BLM gear would be “to compel employer speech,” the company counters. And that, it says, violates the First Amendment.

As it stands, Whole Foods’ corporate policy forbids employees from wearing any symbols, slogans, flags, messages, logos, or advertising while working. In 2020, supervisors at various Whole Foods locations allegedly enforced this policy against employees wearing BLM gear. Staff wearing BLM masks and pins were allegedly asked to remove them, sent home for refusing to remove them, or otherwise disciplined for refusing to take them off.

The NLRB says that wearing BLM messages at work counts as “raising concerns about working conditions” and accuses Whole Foods of having and enforcing an appearance rule “to restrict employees from engaging in concerted activities for their mutual aid and protection.” Whole Foods “has been interfering with, restraining, and coercing employees in the exercise of the rights guaranteed” by the National Labor Relations Act, it says—and that, it declares, amounts to unfair labor practices.

Whole Foods “denies each and every allegation contained in the Complaint,” the company wrote in response, asking that the complaint be dismissed entirely.

Whole Foods argues that “employees do not have a protected right…to display the phrase ‘Black Lives Matter’ or ‘BLM’ in the workplace,” and that the NLRB’s complaint represents an effort to expand the protections of the National Labor Relations Act “beyond current NLRB and judicial interpretation.”

Under current interpretations of the statute, nothing the BLM-promoting Whole Foods staffers did would qualify as protected activities, the company argues. Nor would Whole Foods’ actions here qualify as illegally interfering with protected workplace activities.

The company “maintains a neutral dress code that is lawful under extant Board law,” it adds, and “all discipline issued to employees was solely for violations of [this] neutral dress code.” Such actions “were based on legitimate, non-discriminatory and non-retaliatory factors.”

In a statement last month, NLRB Regional Director for San Francisco Jill Coffman claimed this case is about “issues of racial harassment and discrimination [that] are central to employees’ working conditions.”

But “the phrases ‘Black Lives Matter,’ ‘BLM,’ the ‘Black Lives Matter movement,’ and/or ‘blacklivesmatter.org’ are not objectively understood to relate to workplace issues,” the company argues.  Rather, “employees’ wearing of ‘Black Lives Matter’ and/or ‘BLM’ in Whole Foods Market brand stores was an exercise in political and/or social justice speech through which [they] sought to support societal changes outside the workplace and…without a nexus to any term or condition of employment at Whole Foods Market brand stores.”

Requiring Whole Foods to allow BLM messaging as part of employee uniforms would compel speech and be unconstitutional, the company argues. If the NLRB gets its way, it adds, that would force Whole Foods to act in a discriminatory manner by requiring that the company favor “certain expressions of political speech over others in its retail grocery stores.” (Alternately, it could allow any type of political messaging, but something tells me supporters of the staff wearing BLM gear wouldn’t be so happy to buy groceries from a guy in a MAGA mask…)

Whole Foods also asserts that no employees were fired over this matter but that they voluntarily resigned rather than comply with the dress code.

A hearing with an administrative law judge of the NLRB is scheduled for March 1.

Last year, a federal judge dismissed most of a class-action lawsuit over Whole Foods stores disallowing BLM gear at work. Plaintiffs in the civil case accused Whole Foods supervisors of selectively enforcing the policy and of illegal discrimination and retaliation. Even if the claims about unequal enforcement are true, Whole Foods is still not breaking the law, U.S. District Judge Allison Burroughs ruled. “There is no right to free speech in a private workplace,” she said, and it’s legal for a company to choose which messages or logos its staff can endorse while at work.

“At worst, they were selectively enforcing a dress code to suppress certain speech in the workplace,” wrote Burroughs in her decision. “However unappealing that might be,” she continued, “it is not conduct made unlawful” by the Civil Rights Act of 1964. The law “prohibits discrimination against a person because of race. It does not protect one’s right to associate with a given social cause, even a race-related one, in the workplace.”

The Whole Foods/BLM debate “highlights an increasingly incomprehensible position on corporate speech for many on the left,” law professor Jonathan Turley recently suggested. Many progressives have argued that social media platforms, web hosting companies, and other internet entities should be allowed (and encouraged) to ban various types of legal speech—coronavirus misinformation, say, or false claims of election fraud. Under this rubric, Whole Foods should also be allowed to tell employees what messages not to wear at work.

To the extent that conservatives agree that Whole Foods shouldn’t be forced to allow BLM attire as part of its uniforms, the case also highlights hypocrisy on the right, where many have argued that social media companies should be forced to host political content that they find objectionable.

Perhaps the takeaway here is that allowing the government to compel companies to host any type of political speech is a slippery slope. Letting companies decide what kinds of speech they’ll allow on their premises and platforms isn’t only the constitutional thing to do. It’s the best way to ensure that each side will get its way sometimes, and that consumers can avoid being constantly bombarded with political messages at every turn.

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The Tennessee Supreme Court could soon decide whether home recording studios can keep making music in Music City.

On Wednesday, the court heard oral arguments in a lawsuit challenging Nashville’s restrictions on client visits to home-based businesses. The plaintiffs argue that the city’s regulations arbitrarily and unfairly deprive them of their right to earn a living.

“I’ve been doing this for 30 years here, so I’ve already sunk my entire life’s career and family into this,” says Lij Shaw, one of two plaintiffs suing Nashville over the rules. “For me and most people I know, we can’t stop making music. We’re artists, and we love to do this.”

Shaw, who Reason profiled in 2019, has been fighting to save his business, The Toy Box Studio, since 2015. That’s the year Nashville’s code enforcers informed him that the law barred him from recording musicians for pay at his home. Presented with the choice of either shutting down his operation or fighting back, Shaw chose the latter.

In 2017, he and Patricia Raynor—whose home hair salon business was similarly targeted—sued Nashville to overturn its prohibition on client visits.

Their lawsuit argues that neither business has caused any injury to its neighbors by receiving customers at their homes, making Nashville’s restriction on client visits arbitrary.

The city, Shaw notes, places no limits on how many people you can invite into your home for free, which allows for much more disruptive activities.

“It would technically be legal to hire the entire symphony orchestra to come to my studio, park all over the neighborhood like a football party, and record all weekend,” says Shaw. “But if they paid me $1 for a thank you, it would be illegal.”

Shaw and Raynor’s complaint also says that Nashville’s policy is unfair to their particular businesses, given that the city allows home-based businesses such as short-term rentals to have up to 12 paying customers onsite. This unequal treatment, they argue, violates the Tennessee Constitution.

In 2019, a Davidson County Chancery Court judge ruled against Shaw and Raynor. Because Nashville could articulate potential harms from allowing home-based businesses to serve clients onsite, the judge said, the prohibition was rational and, thus, constitutional.

Home-based businesses received something of a reprieve the following year. In July 2020, Nashville’s Metro Council voted to amend its client visit prohibition to allow home businesses like Shaw and Raynor’s to service up to six customers onsite per day.

That’s an improvement over the status quo, says Keith Diggs, an attorney at the Institute for Justice, a public interest law firm representing Shaw and Raynor. (The Tennessee-based Beacon Center is also working on the case.) But it’s still unequal treatment, he notes.

“Pat and Lij can only have six clients a day,” Diggs notes, while “day care homes [and] historic home events can have up to 12 more clients a day.” The city’s ordinance also sunsets in January 2023. It is unclear whether client visits will be flatly prohibited or totally unregulated after the law expires.

An attorney for Nashville told the Tennessee Supreme Court yesterday that while the ordinance is ambiguous, it’s her interpretation that there will be no restrictions on client visits once the law expires.

Diggs says that Nashville has taken conflicting stances on what happens after the law sunsets. That ambiguity—and the fact that the city could easily reimpose explicit restrictions on client visits in the future—still makes this a live issue, he says.

During yesterday’s hearing, the justices spent most of their time exploring whether Shaw and Raynor’s case is moot given that Nashville has lifted its blanket prohibition on client visits and given that the new six-client-a-day limit is set to expire next year.

They could choose to dismiss the case, send it back to a lower court, or rule outright on the merits of Nashville’s restrictions.

The hope, says Diggs, is that the state Supreme Court will issue a decision saying that “facts actually matter.”

At no point, he says, has Nashville been able to show that Shaw or Raynor’s home businesses were negatively impacting their neighbors. Without that, he argues, the city shouldn’t be able to impose restrictions on what business owners can do on their own property.

Shaw says a ruling protecting home businesses would add much-needed certainty for his studio, which he has sunk some $50,000 into since Nashville passed its temporary rules allowing client visits. He says it would also help preserve the unique music scene that has made his city famous.

“Music City is still a rare gem in the world where the world’s musicians get together face-to-face in front of microphones,” he says. “Without the ability to have a musician come to my home studio, I’ll be forever stuck in a world of Zoom calls and computer living. I don’t want to let the old music die.”

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Today Justice Breyer formally announced his retirement in a letter to the President. As usual, with Breyer, nothing is simple. His retirement is contingent on several conditional statements. Breyer wrote that “I intend this decision to take effect when the Court rises for the summer recess this year (typically late June or early July) assuming that by then my successor has been nominated and confirmed.” So, for at least the next five months or longer, Breyer remains on the Court.

Later, Breyer appeared at the White House alongside the President in the Roosevelt Room. Breyer made brief, rambling remarks that touched on the Gettysburg Address. After Breyer finished, the President invited Justice Breyer and his wife to spend a night in the Lincoln Bedroom, which has a handwritten copy of the Gettysburg Address.

President Biden invites Justice Breyer and his wife to come and stay in the Lincoln Bedroom at the White House.

— Matt Viser (@mviser) January 27, 2022

My mind immediately jumped to controversies over how President Clinton rewarded his donors with stays in the Lincoln Bedroom. My next thought was, the United States still has cases pending in the Supreme Court, both as a party and as amicus. Again, Justice Breyer hasn’t retired yet. And, to be frank, Breyer hasn’t stepped down until he finally steps down. We know announcements of resignation can be modified or even rescinded.  In my view, making an offer for a night in the White House, however gracious, to a sitting Supreme Court Justice, strikes me as problematic.

Breyer may have a precedent to fall back on. Remember when Justice Scalia took a hunting trip with Vice President Cheney? Scalia vigorously defended his independence. Then again, Scalia’s opinion distinguished his conduct from a private gathering at the White House:

The principal point, however, is that social courtesies, provided at Government expense by officials whose only business before the Court is business in their official capacity, have not hitherto been thought prohibited. Members of Congress and others are frequently invited to accompany Executive Branch officials on Government planes, where space is available. That this is not the sort of gift thought likely to affect a judge’s impartiality is suggested by the fact that the Ethics in Government Act of 1978, 5 U. S. C. App. §101 et seq., p. 38, which requires annual reporting of transportation provided or reimbursed, excludes from this requirement transportation provided by the United States. See §109(5)(C); Committee on Financial Disclosure, Administrative Office of the U. S. Courts, Financial Disclosure Report: Filing Instructions for Judicial Officers and Employees, p. 25 (Jan. 2003). I daresay that, at a hypothetical charity auction, much more would be bid for dinner for two at the White House than for a one-way flight to Louisiana on the Vice President’s jet. Justices accept the former with regularity. While this matter was pending, Justices and their spouses were invited (all of them, I believe) to a December 11, 2003, Christmas reception at the residence of the Vice Presi-dent—which included an opportunity for a photograph with the Vice President and Mrs. Cheney. Several of the Justices attended, and in doing so they were fully in accord with the proprieties.

But Biden did not invite all of the Justices. He invited only one of them for a private stay.

Justice Breyer probably won’t take Biden up on this offer. And the White House may see fit to withdraw the offer.

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