Epic Games asks US Supreme Court to review Apple antitrust case

Wed, September 27, 2023 
By Stephen Nellis

(Reuters) - Epic Games on Wednesday asked the U.S. Supreme Court to review the antitrust case it brought against Apple, hoping to reverse lower court rulings that have found the iPhone maker has not violated antitrust laws.

"Fortnite" owner Epic has waged a multi-year legal battle against Apple alleging its App Store, where developers pay commissions of up to 30% on in-app purchases, violates U.S. antitrust laws. In 2021, a trial court ruled Apple's App Store does not break antitrust laws.

But the lower court said a provision that prevents developers from providing users with a link to other third-party payment methods violated a California unfair competition law. Apple was ordered to change that practice, but those orders have been on hold while the appeal plays out.

Earlier this year, the U.S. Ninth Circuit Court of Appeals upheld the lower court's ruling, and the U.S. Supreme Court has already refused an emergency bid by Epic to enact the lower court ruling about changing App Store rules, saying they must remain on hold.

Epic's filing on Wednesday asked the U.S. Supreme Court to clarify several complex areas of antitrust law.

The trial court found Apple's practices do in fact reduce competition in the software market, but found in favor of Apple's arguments that those anticompetitive effects are offset by its efforts to keep iPhones secure.

Epic has argued the trial court performed that legal balancing test incorrectly.

Apple did not immediately respond to request for comment.

(Reporting by Stephen Nellis in San Francisco; Editing by Daniel Wallis)

Epic Games asks Supreme Court to reconsider Apple antitrust ruling

The company previously attempted to force Apple to change its App Store payment practices.

Malak Saleh
·Reporter
Wed, September 27, 2023


Epic Games has asked the US Supreme Court to review a ruling from 2021 that cleared Apple of violating antitrust laws, according to a Bloomberg report. The Fortnite maker previously claimed that Apple violated California's Unfair Competition law, stating that the App Store prohibits developers from directing users to other third-party payment systems. The US Ninth Circuit Court of Appeals upheld the 2021 court’s decision back in April, finding that Apple’s practices had “a substantial anticompetitive effect that harms consumers,” but didn’t meet the bar for an antitrust case.

Should Epic win its appeal, Apple could stand to lose a substantial source of revenue. The company takes a cut of all purchases made through its App Store, which can run as high as 30 percent. Epic Games has been the loudest voice protesting this cut, though other companies like Spotify and Tile are also part of the Coalition for App Fairness, which has been pressuring Apple to change its policies. Outside of the US, Epic and its peers have had more success in changing the status quo: Authorities in both South Korea and the Netherlands have ruled that Apple must allow third-party payments, though Apple is still taking a considerable cut as a “transaction fee.” Apple is also rumored to be preparing support for third-party app stores in response to the European Union’s Digital Markets Act.

Bloomberg says the Supreme Court could decide if it will take up the case before the end of the year. In the meantime, Fortnite is still not available on the App Store. It’s been absent since August 2020, when Apple banned the game after Epic added alternative payment methods to bypass the App Store cut.

Epic is also in a legal battle with Google for similar practices. Both Epic and the Match Group, which operates dating apps like Hinge and Tinder, are alleging that Google abuses its control of Android app distribution through the Play Store by establishing unfair fees and requirements for in-app purchases. That trial is supposed to kick off in the next few weeks.

Epic asks the Supreme Court to weigh in on its beef with Apple


Taylor Hatmaker
Wed, September 27, 2023 


We haven't heard the last of Epic's crusade against Apple over the iPhone maker's App Store fees.

Epic Games filed a cert petition with the Supreme Court on Wednesday, setting things in motion for the highest court in the land to reexamine if Apple's software business violates federal antitrust laws.

We'll know in the coming months if the Supreme Court will select the case, which would reopen a protracted legal battle between the two companies that's wended its way through the courts for going on five years now. Apple will likely file a petition soon too, taking issue with a previous ruling that was partially sympathetic to Epic's complaints.

Epic Games, which makes Fortnite and runs its own software marketplace, the Epic Games Store, initially sued Apple back in 2020. That lawsuit came after Apple booted Fortnite from iOS — a controversy that Epic itself kicked off by purposefully breaking App Store rules by giving players a way to pay directly for Fortnite's in-game currency.

That workaround circumvented Apple's controversial fees, running afoul of the tech giant's guidelines in the process and kicking off Epic's vigorous campaign to rally developers against Apple's longstanding software practices.

Earlier this year, Apple largely won an appeals court fight with Epic stemming from the same complaints over the company's App Store policies. In an opinion issued in April, the Ninth U.S. Circuit Court of Appeals upheld most of a previous decision issued by a federal judge in U.S District Court for the Northern District of California. That ruling denied most of Epic's argument that Apple violates federal antitrust laws by boxing out alternative software markets on iOS.

While the courts mostly landed on Apple's side, the federal judge did rule that Apple violated California’s Unfair Competition Law by restricting developers from telling consumers about alternative payment options — a sliver of a win for Epic. The appeals court affirmed that decision earlier this year.

With the ongoing legal fight now headed in the direction of the Supreme Court, Epic requested that developers be allowed to point iPhone users toward payment options beyond Apple's walled garden. That request was rejected by Justice Elena Kagan in August, meaning that Apple's existing rules will remain in place for now unless the Supreme Court decides not to weigh in after all.

View this document on Scribd


App Store payment rules won’t change as Apple’s battle with Epic Games heads to Supreme Court

SEC chief says new California law could 'change baseline' for coming SEC climate rule

Wed, September 27, 2023 U.S. Securities and Exchange Commission (SEC) Chairman Gensler testifies on Capitol Hill in Washington


(Reuters) - A pending law in California that would require companies to make climate-related disclosures could affect how federal regulators consider the costs of their own forthcoming climate regulations, Wall Street's top regulator told lawmakers on Wednesday.

U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler's testimony during a house oversight hearing highlighted the potential for the California law to support the agency's efforts to regulate corporate climate disclosures, which face stiff opposition from industrial lobbies.

"If it were signed into law, as I understand it, that would require companies a certain size to report their climate risk," Gensler said in testimony before the House of Representatives.

"That may change the baseline. If those companies were reporting to California, then it would be in essence less costly because they'd already be producing that information."

California Governor Gavin Newsom said earlier this month that he intended to sign legislation requiring large companies to disclose their carbon footprints.

The bill tackles one of the thorniest issues in climate regulation by asking companies to measure and report a complex category of indirect emissions linked to their supply chains and end-users, known as Scope 3.

The SEC last year proposed long-awaited regulations that would likewise require publicly traded companies to notify investors of the companies' emissions, as well as climate-related spending and risks, amid a wider global effort to address fossil fuel-driven climate change by requiring companies to disclose their emissions and risks.

Among a barrage of objections, industry has complained the SEC has underestimated the cost of complying with the proposed rule.

Companies and industry groups have complained that the proposed rule would require them to develop new systems for accounting for emissions, not only by themselves but by their suppliers, driving up the costs of complying with the law for industries as varied as agriculture, transportation and banking.

(Reporting by Douglas Gillison; Editing by Aurora Ellis)

UBS, Credit Suisse face wider US probe over Russia sanctions -Bloomberg News

Reuters
Wed, September 27, 2023

UBS and Credit Suisse banks logos are seen in Zurich

ZURICH (Reuters) - UBS shares fell on Wednesday after a report that the U.S. Department of Justice has stepped up scrutiny into alleged compliance failures that helped Russian clients evade sanctions.

UBS declined to comment to Reuters when asked for a response to the Bloomberg News report, which said the alleged compliance failures related to UBS and Credit Suisse, which was taken over by its larger rival UBS earlier this year.

A full-scale investigation by the Department of Justice focusing mainly on Credit Suisse and potential sanctions violations was now underway, added the Bloomberg report, citing people familiar with the matter.

The Department of Justice declined to comment.

UBS, in its latest financial report at the end of August, said its sanctions programmes are designed to comply with sanctions across multiple jurisdictions, "including those imposed by the United Nations, Switzerland, the European Union, the UK and the United States".

Switzerland's largest bank also said in the report that Credit Suisse offices in Britain, Netherlands, France and Belgium, have been contacted by law enforcement officials as part of an investigation into cross border banking for rich clients, without giving details.

"Credit Suisse has conducted a review of these issues, the UK and French aspects of which have been closed, and is continuing to cooperate with the authorities," UBS added.

Trading in UBS shares was temporarily halted after they fell nearly 8% following the report. The Swiss bank's shares later recovered to trade 3.3% lower at 1500 GMT.

The Bloomberg report, citing people familiar with the matter, said the DOJ had spoken to U.S.-based lawyers for UBS about Credit Suisse's alleged exposure to sanctions violations since UBS acquired its smaller rival in June.

The DOJ is also looking into possible compliance failures at UBS, one of the people cited by Bloomberg said. The people also said the investigation was still in the early stages, and might not result in charges or a settlement.

Bloomberg's report said the DOJ probe covers restrictions imposed after Russia's 2022 invasion of Ukraine and previous rounds put in place following its 2014 annexation of Crimea.

JP Morgan said in a note that a DOJ investigation was a headwind to UBS, but the bank had built sufficient provisions to deal with any costs arising from the case.

UBS had litigation provisions of $4.7 billion at the end of June, while the bank could make a further $2.2 billion in provisions related to potential future litigation hits.

The Swiss bank has also adjusted its valuation of Credit Suisse by $3 billion to cover outflows related to contingent liabilities such as law suits.

"Overall, this is $6.8bn in provisions and $3bn in contingent liabilities i.e. nearly $10bn in litigation related buffer in our forecasts," JP Morgan said.

(Reporting by Shivani Tanna in Bengaluru and John Revill in Zurich; Editing by Krishna Chandra Eluri, Emelia Sithole-Matarise, Jane Merriman and Alexander Smith)

‘Let me be blunt’: UAW VP for GM has strong words about Trump’s visit to Michigan

Jamie L. LaReau, Detroit Free Press
Updated Wed, September 27, 2023 

The UAW's lead negotiator in contract talks with General Motors on Wednesday issued a scathing assessment of former President Donald Trump hours before Trump was due to speak in Detroit.

UAW Vice President for General Motors Mike Booth sent the Detroit Free Press a profanity-laden email about his thoughts on Trump's trip to Michigan.

"Let me be blunt. Donald Trump is coming off as a pompous (expletive)," Booth said in an email. "Coming to Michigan to speak at a nonunion employer and pretending it has anything to do with our fight at the Big Three is just more verbal diarrhea from the former president."

Trump was expected to deliver prime-time remarks at Drake Enterprises in Clinton Township. The auto parts supplier is nonunionized. According to an AP report, Trump will speak to a crowd of "several hundred current and former UAW members, as well as members of plumbers and pipefitters unions."


Booth's remarks came as he and GM negotiators were due back at the main bargaining table with GM leadership Wednesday afternoon, two sources familiar with the talks told the Detroit Free Press.

Booth said Trump's visit to Detroit is disingenuous given his past. In a video about plant closings that the union released Wednesday morning, 2017 footage shows Trump promising autoworkers in Ohio he would save their jobs. But in 2019 GM closed its Lordstown Assembly plant in northeast Ohio, displacing thousands of workers there and helping lead to the union's 2019 strike against GM.


"Where were his rallies for striking workers when we were on the picket line in 2019? Where are the jobs he promised to return to the U.S. while on the campaign trail in 2015?" Booth said. "The proof is in the pudding. His actions in office went to enrich the very elite few while the working class of America stagnated. This stunt is another ploy to pull the wool over the eyes of the working class. Again!”

As for GM's reaction to Trump's visit, it remained the same as the statement the company provided for President Joe Biden's visit on Tuesday, which is that its focus is not on politics but on bargaining to reach an agreement as quickly as possible.

"We have presented five, record economic proposals that address the areas our team members have said matter most, including wage increases and job security," GM's statement read. "We value our workforce and understand the impact a strike has on our employees, communities and the economy — nobody wins."

The union's support is crucial for both presidential candidates: Trump and Biden. In 2016, UAW members in Michigan helped Trump win the White House. In 2020, UAW members in Michigan helped Biden take the White House from Trump. That's why both men are courting union support in Michigan

Trump hasn't voiced support for the union's demands, unlike Biden, who said the workers deserved a good contract. But Trump has said that UAW workers should reject the automakers' transition to making more electric vehicles. The Biden administration and Democrats have a green agenda and are in favor of EVs.

The union has supported Trump's "new NAFTA" or United States-Mexico-Canada Agreement. It was designed to create more U.S. manufacturing jobs because it mandated that 70% of the steel and aluminum in a car be sourced from North America, and that seven core vehicle parts also meet North American content requirements.

UAW President Shawn Fain has not endorsed either man for president, saying whoever gets the endorsement must earn it.

In a historic first Tuesday, Biden walked the picket line with striking UAW workers at GM's Willow Run Redistribution Center in Van Buren Township, where the automaker stores and distributes parts. Fain joined Biden, and when asked later on CNN whether Fain would meet Trump on Wednesday, Fain replied: "I see no point in meeting with him," because Trump doesn't care what "the working class stands for."

"In 2019, when he was the president of the United States, where was he then?” Fain said. “Our workers at GM were on strike for two months. … I didn’t see him hold a rally, I didn’t see him on the picket line and I sure as hell didn’t see him comment on it. He was missing in action.”

Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.

This article originally appeared on Detroit Free Press: Trump’s Michigan visit: UAW VP for GM Mike Booth has strong words


UAW negotiator lays into Trump: ‘Where are the jobs he promised?’

Miranda Nazzaro
Wed, September 27, 2023 



The Union Auto Workers’s (UAW) lead negotiator in contract talks with General Motors dug into former President Trump, just hours ahead of the former president’s talk with union workers in Michigan, calling his expected rally “verbal diarrhea.”

In a letter first sent to the Detroit Free Press, UAW Vice President for General Motors Mike Booth wrote, “Let me be blunt. Donald Trump is coming off as a pompous a–hole. Coming to Michigan to speak at a nonunion employer and pretending it has anything to do with our fight at the Big Three is just more verbal diarrhea from the former president.”

The letter, later shared by the UAW with The Hill, comes just hours before Trump is expected to hold a rally at a nonunion plant with current and former union workers amid their ongoing strikes against the “Big Three” automakers – Ford, General Motors and Stellantis.

“Where were his rallies for striking workers when we were on the picket line in 2019? Where are the jobs he promised to return to the U.S. while on the campaign trail in 2015?” Booth said. “The proof is in the pudding. His actions in office went to enrich the very elite few while the working class of America stagnated. This stunt is another ploy to pull the wool over the eyes of the working class. Again!”

Booth’s comments are likely a reference to Trump’s vow during his 2015 presidential campaign to bring millions of jobs back to America and away from foreign adversaries.

Booth’s comments echo those from UAW President Shawn Fain Tuesday, who said Trump serves a “billionaire class,” and does not have “any bit of care about what our workers stand for, what the working class stands for.”

Like Booth, Fain also took aim at Trump’s track record, asking where the former president was during the 2019 strike by General Motors workers. Fain also called out Trump’s rpopsoal during his 2016 presidential campaign to rotate auto manufacturing industry jobs from the Midwest to the South, which the union has argued would force union workers into jobs with lower wages.

Trump’s visit to Detroit comes on the heels of President Biden’s trip to Belleville, Mich. on Tuesday, where he joined the picket line with striking autoworkers. The move was seen by some as a likely offense against Trump, who could be the incumbent’s 2024 presidential opponent.

Biden spoke at a General Motors facility alongside Fain, who has yet to endorse Biden’s reelection bid, citing concerns over the Biden administration’s push for electric vehicles (EVs), which put autoworkers’ jobs at risk.

The UAW began its strike against the automakers nearly two weeks ago, and expanded it to an additional 38 locations last week. Reports surfaced Wednesday that the union could further expand the strike Friday if significant progress is not made in talks with Detroit automakers.

The union is asking for wage increases, cost-of-living pay raises, a 32-hour work week with 40 hours of pay, union representation at new battery plants, restoration of traditionally-defined benefit pensions for new hires who currently receive only 401(k)-style retirement plans, and pension increases for retirees.

US autoworkers strike: when will dealerships run out of cars to sell?

Inventories of popular models like Ford Bronco are running low amid UAW action


Peter Campbell in London and Claire Bushey in Wayne, Michigan

 FT

SEPTEMBER 26 2023

There are plenty of new Jeeps and Ford Broncos for sale at Jay Darling’s dealerships. At least for now.

But the assembly lines that make these models, as well as the Chevrolet Colorado truck, have been idle for almost a fortnight following a strike by the United Auto Workers.

It is the first time that the UAW has simultaneously targeted all three of the carmakers that dominate Detroit — Ford, General Motors and Stellantis — as the union seeks higher pay for workers at a time of record profits for the industry.

As the work stoppage continues, one question looms over dealerships operating in the US: when will they run out of vehicles to sell?

Darling, who manages 15 locations across Maine, expects inventories of affected vehicles to shrink over the next four to six weeks.

“Eventually, some of these plant closures are going to affect allocations [to dealers] and inventory levels,” said Darling, who stocks the Ford Bronco as well as Stellantis-made Jeeps and GM’s Chevy Colorado.

“I sell all three brands, so I’ll be affected in all three areas,” he added. “That’s probably the most catastrophic part of this, that it’s three at once.”

As pay talks became heated in the weeks before the strike, attention turned to the inventory of vehicles made by the so-called Detroit Three that are still sitting on dealer forecourts.

The measure is crucial for customer retention because most US motorists want to drive their vehicle away on the day they buy rather than waiting for months for a factory order.

This typically means that American showrooms stock higher numbers of cars than in non-US markets. Often, if customers cannot buy the car they want there and then, they will purchase one from a neighbouring dealership and potentially a rival brand.

“People are going to have to go to where there’s inventory,” Darling said. “The people that can produce vehicles will be a winner from [the strike].”

Sometimes carmakers bracing for a strike will pump out a larger-than-normal number of vehicles in the weeks beforehand to prepare for the impending downtime. But this time round, data experts saw little sign of automakers boosting output ahead of the industrial action.

According to data group Cox Automotive, GM has 58 days of supply across all its brands, Ford has 85 days and Stellantis has 107.

“That puts Stellantis in better shape to resist, but it’s all theoretical,” said Philippe Houchois, an auto analyst at Jefferies.

Inventories of some models are even tighter. Dealers can keep selling the Jeep Wrangler, made by Stellantis, for 74 days without replenishing their stocks, but can go less than half that time before running out of the Chevy Colorado. For the Ford Bronco and Ranger, both made at a striking plant in Wayne, Michigan, there is 40 and 26 days of supply, respectively.

“We’re certainly feeling an impact,” said Matthew Demmer, owner of Jack Demmer Automotive Group, which has a dealership location across the road from the Ford plant in Wayne.

“Michigan Assembly makes two hot products, Bronco and Ranger. Our supply on those two products has pretty well dwindled out at this point,” Demmer added. “We’re still taking orders, we’re still trying to connect clients with something in the system . . . but unfortunately, part of this is the waiting game.”

One potential point of weakness for carmakers is that they are operating with less room for manoeuvre, after a three-year period during which they made record profits from lower sales as pandemic supply shortages boosted prices.

“The industry has enjoyed tightness of supply, which helped pricing,” said Houchois. “It seems this time the industry was willing to go into this strike with less inventory than before because they wanted to influence pricing.”

This, however, is a gamble. The UAW’s strategy of targeting specific plants with limited notice not only prevents the quick depletion of the union’s strike fund. It also causes maximum disruption for carmakers.

Auto industry recovery has favoured investors and bosses over workers

After a strike in 2019, GM was able to boost production and make up lost revenue, “essentially limiting the strike impact to about half a month’s worth of sales”, said analyst Tom Narayan at RBC Capital Markets. GM has said that strike cost it $3.6bn.

But the unpredictability of this year’s industrial action means that while the impact on sales could be smaller, the length and scale of the knock-on disruption is harder to forecast.

“Guerrilla warfare can be as painful as full-out war,” said Houchois. “You hit one plant, and end up destructing the whole organisation.”

The carmakers “have more of an incentive to settle, because you have no idea what is going to hit you next”, he added.

However, there are also risks for the UAW. If the strike drags on, customers could turn to marques that are not made by Ford, GM or Stellantis. This in turn threatens the market share of companies that employ UAW members, potentially weakening their job security in the future.

“The worst-case scenario is if the Detroit Three lose share, and [it goes] to . . . Japanese or Korean [rivals],” Houchois said.

UAW president Shawn Fain has kept his lips sealed on some strike needs. Is it symbolic?

Jamie L. LaReau,

 USA TODAY NETWORK
Wed, September 27, 2023 

UAW President Shawn Fain's most recent update on contract talks with Detroit Three automakers left out a number of original demands, prompting some experts to wonder whether the talks are starting to focus on what really needs to get done.

Fain laid out for union members Friday the most recent offer from Ford Motor Co. and the areas the union considers gains with the company, signaling to General Motors and Stellantis where they might be coming up short. For example, Fain said, Ford agreed to reinstate a cost-of-living adjustment (COLA), which would be a big win. He said neither GM nor Stellantis had offered the same.

Strikers walk out at noon from 38 GM, Stellantis parts including Center Line Packaging as UAW President Shawn Fain called for more shops to go out on strike Friday, Sept. 22, 2023.

Three sources familiar with the negotiations told the Detroit Free Press on Monday that the expectation is Ford will likely reach a tentative agreement with the UAW before the other two automakers, who would then use the deal as a template for their contract offers.

Given his previous list of demands, Fain made no mention Friday of the status of the union's requests for a 40% wage increase across the life of the contract, of establishing a 32-hour work week, or reinstating pensions and retiree health care benefits, all of which indicate to industry experts that those issues might be close to being settled with the automakers or they are possibly off the table for now.

"Fain has been publicly vocal about his demands," said Erik Gordon, business professor and labor expert at the University of Michigan Ross School of Business. "People who negotiate in public rarely announce, 'We have given in on X.' They just stop talking about it."
Did Ford reach a deal with UAW?

A source familiar with the negotiations who asked to not be named because they are not authorized to be quoted in the media said throughout the weekend the union and Ford had “very active talks,” but there are “some key issues to go.” As for GM and Stellantis, the source said the union was not seeing the same movement as with Ford. But things were fluid and communication remained open.

But this person also said Fain did not update all of the demands during his Friday Facebook presentation so as to keep his announcement short and to emphasize real movement at Ford compared with GM and Stellantis. The demands Fain did not mention are not necessarily settled or off the table, this person said.

See the picket lines as UAW strike launched, targeting big three Detroit automakers

Some labor experts the Free Press interviewed noted that history dictates otherwise.

"Historically, when an end appears in sight in UAW bargaining the president pares down demands to include what the union absolutely needs ... what the union needs to assure ratification, which in fact is in the interest of both parties," said Harley Shaiken, professor emeritus at University of California-Berkeley.

Marick Masters, a business professor and labor expert at Wayne State University, said it is noteworthy that the UAW spared Ford in the union's expansion of the strike to more facilities Friday, citing the progress Ford had made in talks.

Fain ordered some 5,500 additional union members at 38 sites to walk off the job Friday at all parts distribution centers across the nation at GM and Stellantis. But Masters said beyond the increased pressure on those two automakers, it's hard to make out what Fain's strategy might be based on Friday's comments.

"Interestingly, Fain did not enumerate wages, the four-day work week, retiree health care, and defined benefit pensions. Are these items either settled or off the proverbial table? Most likely not," Masters said. "Silence does not manifest agreement."

He said it's possible the parties are narrowing the gap on the issues and the overall "scope of terrain" they are considering.

"In any negotiation, there are tradeoffs between issues," Masters said. "Shawn Fain has repeatedly said that he does not expect to get everything in the members' demands. That does not tell me he or the UAW discounts certain demands, but they realize that successful bargaining occurs in the realm of the possible."
What is the UAW asking Ford for?

Fain first declared a strike as contract talks failed before the current contract expired at 11:59 p.m. Sept. 14. Fain announced the first wave of plants the union would strike as: Ford Michigan Assembly Plant (Final Assembly and Paint only) in Wayne, Stellantis Toledo Assembly Complex in Ohio and GM's Wentzville Assembly in Missouri. There are about 13,000 workers on the picket lines at those three sites in addition to those sent out Friday.

"I can see Ford getting a (tentative agreement) as early as this week, definitely within the next 30 days," said another person familiar with the bargaining across the companies. "The company wants to get people back to work and people want to go back to work. If we get a TA with Ford, I think GM will fall in line. I don’t know about Stellantis."

This person said union leaders know there will be give and take in the ultimate agreement. For example, most union leaders know they are unlikely to get a 32-hour work week, but "we are going to have a conversation about work/life balance."

This person asked to not be identified due to the sensitivity of the negotiations.

For it's part, Ford said in a statement Friday it is working "diligently with the UAW" to reach a deal and although it is "making progress in some areas, we still have significant gaps to close on the key economic issues. In the end, the issues are interconnected and must work within an overall agreement that supports our mutual success.”

On Monday evening, as President Joe Biden prepared to head to Detroit to join the UAW on the picket line, Ford said it would stay focused on bargaining adding, "Ford and the UAW are going to be the ones to solve this by finding creative solutions to tough issues together at the bargaining table."

Here are the areas where Ford and the UAW have made progress, Fain said Friday:

Reinstating the cost-of-living adjustment (COLA) to offset increases in inflation over the life of the contract.


Eliminating a wage tier by putting Rawsonville Components and Sterling Axle employees on the same wage as assembly workers.


Agreeing the union has a right to strike over any plant closures.


Offering two years pay and health care coverage for laid-off workers.


Agreeing to immediately convert all temporary workers to regular full-time with at least 90 days employment upon ratification of a new contract.


Agreeing to an enhanced profit-sharing formula that would have resulted in a 13.3% increase for the average employee in payouts last year. Also, expand profit sharing to temporary employees who have been employed for at least 90 days.

UAW wants 4-day workweek: The 4-day workweek is among the UAW's strike demands: Why some say it's a good idea

A perfect time to strike: 'If not now, when?': Here's why the UAW strike may have come at the perfect time for labor
UAW already might have a good deal with Ford

Though Fain expressed more frustration amid talks with GM and Stellantis, the UAW "won a serious victory" when GM agreed to eliminate the wage tiers for workers at Customer Care and Aftersales (CCA) and GM Components Holdings (GMCH) facilities. These workers would be on the same scale as assembly workers.

But both GM and Stellantis fall short of offering adequate COLA plans, Fain said Friday. They also rejected the following UAW proposals: job security, profit-sharing and converting temporary employees to permanent, according to Fain.

Two other people familiar with the talks between GM and the UAW indicate that reinstating COLA, which the union lost in 2009 when automakers were struggling, is an area to which GM is most resistant. In its Sept. 14 proposal to the union, which Barra has called a "record offer," GM offered "Cost-of-living inflation protection" for maximum wage earners. The way that would work is if inflation exceeds an annual wage increase, employees at top wage will be paid the difference. So this proposal is not exactly the same as the COLA provision the union wants that would protect all workers from any increase in inflation over the course of the contract.

If the union insists on getting retiree health care, defined benefit pensions and a 32-hour work week, plus COLA and a large wage increase, then a stalemate with the companies, including Ford, seems inevitable, Wayne State's Masters said.

"The terms on which the UAW and Ford have made progress, including eliminating tiers, restoring COLA, accelerating transition from temporary to full-time employment, the right to strike and economic security for laid-off workers, along with increase profit-sharing offer a skeleton of a potential tentative agreement," Masters said. "In a certain respect, the union has already won a good contract based on these preliminary terms."

Holding out for more with expanded strikes and aggressive media relations might work to the UAW's advantage, he said.

"Stronger action may be required to get a deal with either Stellantis or GM,' Masters said. "But a tentative agreement with Ford would give impetus to that end."

Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.

This article originally appeared on Detroit Free Press: In UAW strike negotiations, what is president Shawn Fain not saying?

Auto Workers Aren't Striking Only For Higher Wages. They Want Their Pensions Back, Too

WAGE THEFT BY ANY OTHER NAME

Jo Constantz and Josh Eidelson
Wed, September 27, 2023 

(Bloomberg) -- On picket lines around the country, auto workers aren’t just demanding higher wages. They want to get back their once-sacred retirement pensions.

While United Auto Workers members who were hired prior to the 2008 financial crisis have pensions, those brought on since have received 401(k) plans instead. The union is demanding the auto companies provide pensions for new employees and those who currently lack them.

“We need to do something, because right now, if you came in after ’07, you don’t have a pension,” said Ryan Ashley, a Ford engine plant worker in Cleveland. “You could retire, and the economy tanks. Whereas at least a pension is guaranteed money.”

Ford Motor Co., General Motors Co. and Stellantis NV are determined to consign pensions to the past even as striking UAW members are just as keen to revive them. The fight has resonance well beyond the auto industry: With inflation persisting as the US enters another fraught presidential election cycle, the plight of the middle class — and the financial condition of millions of retirees — is front and center.

Labor experts don’t see a return to a system of full-fledged pensions happening anytime soon, if ever, because of the massive cost associated with them. Even so, demanding pensions is a smart strategy, some say, because it reminds both sides how far behind auto workers have fallen since their heyday.

“The UAW jobs used to be seen as the best jobs and working for the auto company, you’re making big money — buy boats, buy houses, do whatever you want to do,” said Arthur Wheaton, director of Labor Studies at Cornell University’s School of Industrial and Labor Relations who teaches contract negotiations. “If you’re a new hire hired in the last four years, you’re not buying anything, you may be renting and you may be working two jobs. It’s a very different scenario.”

Using pension demands as a bargaining chip could lead to other sweeteners, such as more generous matching contributions to 401(k) funds.

“The UAW might end up settling for something less, but they might say, ‘We’re not giving up on these issues, we’re going to push harder,’” said John Logan, chair of the Labor and Employment Studies department at San Francisco State University.

Up until the 1980s, the most common retirement plans were defined-benefit pensions, under which employees typically get a guaranteed set monthly income in retirement and employers took on the cost and the risk. Nowadays traditional pensions are rare in the US outside of the public sector.

A full-scale shift in almost every industry in the US began in the 1980s, as companies undergoing a wave of restructuring moved from pensions to so-called defined contribution plans, like 401(k)s, where employees decide how much to contribute and companies often match funds up to a set amount. Under this model, the employee assumes most of the cost and all of the risk: There are no guarantees for what an individual’s monthly income will look like in retirement, since that depends on how much money they contribute and how their investments perform.

Now that the major Detroit auto companies are raking in record profits and CEO pay is soaring, striking workers say they deserve to get back the benefits they sacrificed to help the auto companies skirt financial collapse in the 2008 financial crisis.

“The pension part, members who don't have that, they want to be able to retire with dignity,” said Jay Makled, financial secretary of UAW Local 600. For new employees who want to build a career, he said, “it’s top priority.”

What’s at Stake as US Autoworkers’ Strike Drags On: QuickTake

This isn’t the first time autoworkers have tried to get pensions back. A return to pensions was among the demands put forth in 2019, but the debate was sidelined and pensions were left out of a final deal following a 40-day strike against GM. Under current financial accounting standards, the cost of offering a defined benefit plan is prohibitive.

GM’s pension liability could more than double to $129 billion if the automaker were to agree to reinstate a defined benefit pension plan for hourly employees, according to Bloomberg Intelligence analyst Steve Man.

According to people familiar with the companies’ estimates, restoring pensions and granting the UAW’s other original demands — including a more than 40% wage increase, cost-of-living increases, a four-day work week and a boost to retiree benefits — would add more than $80 billion to each of the biggest US automakers’ labor costs. Ford Chief Executive Jim Farley said that proposal, which has since been revised downward slightly by the union, could bankrupt the company.

Perhaps the biggest challenge to bringing back pensions is how they’re baked into financial accounting standards as a cost without any consideration given to the value of human capital, according to Peter Cappelli, director of the Center for Human Resources at the Wharton School of the University of Pennsylvania. Since pensions and other benefits and costs associated with employees, like training, are considered liabilities rather than investments, workers are more often seen as costs to be cut rather than valuable assets. Save any major rewrite of the financial accounting standards and reporting rules, it’s unlikely pensions will be seen as anything other than a huge liability for companies.

Freezing and offloading pensions, for instance offering a lump-sum payout, has allowed companies to jettison what is sometimes their largest expense. When GM froze pensions for salaried workers in 2006, for example, the company reportedly slashed its pension costs that year by $1.6 billion.

“You eliminate those liabilities on your books and suddenly you're much more valuable,” says Cappelli. “The way that game is played, I just can't imagine them wanting to bring it back.”

Still, the UAW’s pension demand, or some version of it, may spread to other unions, reigniting a conversation about a benefit that many thought was long gone, Logan said. From United Parcel Service Inc. to Hollywood, “what you’ve seen in the last year or so, especially,” he said, “is unions are definitely feeling emboldened in many industries right now.”

Bloomberg Businessweek

MONOPOLY CAPITALI$M
Apple is ordered to face Apple Pay antitrust lawsuit

Jonathan Stempel
Wed, September 27, 2023 

The Apple Inc logo is seen at the entrance to the Apple store, in Brussels

By Jonathan Stempel

(Reuters) - Apple was ordered on Wednesday to face a private antitrust lawsuit by payment card issuers accusing the company of thwarting competition for its Apple Pay mobile wallet.

U.S. District Judge Jeffrey White said the plaintiffs could try to prove that Apple violated the federal Sherman antitrust law by enforcing a 100% monopoly over the domestic market for tap-and-pay wallets for iPhones, iPads and Apple Watches.

The Oakland, California-based judge also dismissed a "tying" claim, which accused Apple of requiring purchasers of iOS devices to buy Apple Pay or forego purchases of competing wallets.

Apple, based in Cupertino, California, did not immediately respond to requests for comment.

"We are happy with this ruling," Steve Berman, a lawyer for the plaintiffs, said in an email. "There are billions at stake so getting by the motion (to dismiss) largely intact was huge for the class."

The proposed class action is led by Illinois' Consumers Co-op Credit Union, and Iowa's Affinity Credit Union and GreenState Credit Union.

They said Apple "coerces" people who use its smartphones, tablets and smart watches into using its own wallet for tap-and-pay transactions, unlike makers of Android-based devices that let people choose wallets such as Google Pay and Samsung Pay.

According to the complaint, Apple's conduct forces more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion of excess fees, and harms consumers by minimizing the incentive to make Apple Pay safer and easier to use.

White said the plaintiffs plausibly alleged that Apple allow alternatives to Apple Pay, and that more competition would spur innovation and reduce prices.

In seeking a dismissal, Apple said it charged "nominal" fees to even smaller card issuers, and that the plaintiffs ignored the "competitive reality" that consumers could still pay with cash, credit and debit cards, and other means.

European Union antitrust regulators accused Apple in May 2022 of abusing its dominance in iOS devices and mobile wallets. The regulators have since continued their investigation.

The case is Affinity Credit Union et al v Apple Inc, U.S. District Court, Northern District of California, No. 22-04174.

(Reporting by Jonathan Stempel in New York; Additional reporting by Mike Scarcella; Editing by David Gregorio)

PLAYING HIDE THE SAUSAGE

Apple, Google Agreed to ‘Defend’ Search Deal From Regulators

Emily Birnbaum, Mark Gurman, Leah Nylen and Sabrina Willmer
Tue, September 26, 2023 

(Bloomberg) -- Apple Inc.’s lucrative agreement to use Alphabet Inc.’s Google as the default search engine for the iPhone includes a provision that the two tech giants will “support and defend” the deal against government scrutiny, a top Apple executive said at an antitrust trial.

Their longtime contract was renegotiated in 2016 to include the provision, Apple’s Senior Vice President of Services Eddy Cue disclosed Tuesday in a Washington federal court, where the US government is pressing its claim that Google operates a monopoly in the search business.

Cue, the architect of the most recent version of the agreement, said the provision for a joint defense was added at Google’s request. He said it was handled by company lawyers so he couldn’t speak directly to why it was included. Around that time, the European Union was investigating Google’s dominance in online search.

During his testimony, the executive defended Apple’s arrangement with its tech rival, saying it was the best choice for customers to have Google as the default search engine.

“There certainly wasn’t a valid alternative we would have gone to at the time,” Cue said. “I don’t know what we would have done” if the deal had collapsed, he said.

Google first became the default option in the Safari browser in 2002. That deal has been revised several times. Cue said the contract was extended in 2021, after the Justice Department filed its initial case against Google’s search dominance the year before.

Google pays Apple billions of dollars for this prominent position on products like the iPhone, making the agreement of particular interest to the government. The question before the judge in the antitrust trial is whether the search giant pushed its way onto Apple devices at the expense of competitors.

In his testimony, Cue stressed that Apple sees no need to develop its own search tool because Google clearly is the best option. That differs from the company’s approach in other areas: It competes with Google in mapping software and voice assistants, as well as operating systems for phones and computers.

The Justice Department displayed an email from 2016 in which Cue told Apple Chief Executive Officer Tim Cook that Google CEO Sundar Pichai was not agreeing to Apple’s proposed revenue share. When the Justice Department’s attorney asked Cue whether Apple would have walked away from the negotiation, Cue said he didn’t seriously consider it, but Apple might have created its own search engine.

Read More: What’s at Stake in Google Trial on Antitrust Charges: QuickTake

Part of Cue’s testimony Tuesday was closed to the public because it involved internal company information that Apple and Google want to keep secret.

Cue was expected to testify behind closed doors about Apple’s search arrangements with other companies, which provide the non-default options built into the Safari internet browser, according to a person familiar with the planned testimony. That includes Microsoft Corp.’s Bing, Yahoo, DuckDuckGo and Ecosia. Similar to its agreement with Google, Apple gets a slice of the advertising revenue generated when users select those search engines as their main option in Safari.

Last week, Apple machine learning chief John Giannandrea testified as well. The executive, who led search at Google before joining Apple in 2018, pointed to a new feature in iOS 17 and iPadOS 17 — the latest software that runs iPhones and iPads — that lets users assign a different default search engine for private browsing.

That means Apple users can switch between Google and another option more easily, according to Cue. “We like our products to come out of the box and work where it feels like magic,” he said. However, Apple doesn’t track how many customers actually make the change to a non-Google search engine, because of privacy concerns, Cue said.

The case is US v. Google, 20-cv-3010, US District Court, District of Columbia.

(Updates with testimony from Apple executive.)

Apple exec defends the decision to make Google its default search engine on iPhones and Macs

PAUL WISEMAN
Tue, September 26, 2023

The iPhone 15 phones are shown during an announcement of new products on the Apple campus in Cupertino, Calif., Tuesday, Sept. 12, 2023. On Tuesday, Sept. 26, a top Apple executive defended the tech giant’s decision to make Google the default search engine on Apple iPhones and Macs, saying there was no “valid alternative.’’ (AP Photo/Jeff Chiu, File)

WASHINGTON (AP) — A top Apple executive defended the tech giant’s decision to make Google the default search engine on Apple iPhones and Macs, saying there was no “valid alternative.’’

Testifying in the biggest antitrust trial in a quarter century, Eddy Cue, Apple’s senior vice president of services, said Tuesday that there wasn’t “anybody as good’’ as Google at helping phone and computer users search the internet.

The U.S. Department of Justice has accused Google – a company whose very name is synonymous with scouring the web — of smothering competition by paying Apple, Verizon and other tech companies to make its search engine the first users see when they open their devices.

Google counters that it dominates the market because its search engine is better than the competition, a position Cue supported in his testimony. Google also argues that users can, in any event, switch to other search engines with a couple of clicks.

The antitrust case, the biggest since the Justice Department went after Microsoft and its dominance of internet browsers 25 years ago, was filed in 2020 during the Trump administration. The trial began Sept. 12 in U.S. District Court in Washington D.C.

Mikhail Parakhin, Microsoft’s head of advertising and web services, testified Tuesday that Google’s dominance feeds on itself. The more searches Google processes, the more data it collects that can be used to improve future searches.

“The more data you have, the better the results are,’’ he said, echoing one of the government’s arguments.

Dominating the market helps in other ways, Parakhin said. For example, restaurants are more likely to make sure their location and hours are accurate in results on the leading search engine, while they are far less likely to bother correcting information on smaller search engines.

Experience shows, he said, that search engines need 20% market share to survive. Otherwise, “their quality degrades rapidly, and they disappear.’’’

Parakhin also recounted his experience battling Google in his previous job as chief technology officer at the Russian search engine Yandex. After Russian regulators required Android phones to let users choose their search engine – instead of letting Google hold the default position – Yandex’s market share rose from 30% to 55%, he said.

Earlier in the proceedings, the government called a behavioral economist, who testified that Google's default status discourages users from switching search engines, partly because they are reluctant to change ingrained habits. Last week, the founder of the search engine DuckDuckGo, which has about 2.5% of the search market, testified that his company struggled to compete because of Google's revenue-sharing agreements with Apple and other companies.

U.S. District Judge Amit Mehta likely won’t issue a ruling until early next year. If he decides Google broke the law, another trial will determine how to rein in its market power. The Mountain View, California-based company could be stopped from paying Apple and other companies to make Google the default search engine

MONOPOLY CAPITALI$M
Amazon deprives competitors of critical mass: FTC Chair Lina Khan

Amazon’s antitrust suit culmination of years of work from FTC’s Khan


Alexis Keenan
·Reporter
Wed, September 27, 2023 

A day after the US Federal Trade Commission and 17 states filed a landmark antitrust case against online retail giant Amazon (AMZN), the agency’s chair Lina Khan said Amazon.com is depriving online superstore competitors of the critical mass needed to compete.

“In short, Amazon has a policy that punishes sellers or retailers that lower their price anywhere other than Amazon,” Khan said in an interview Wednesday with CNBC. “At the same time, Amazon is also steadily hiking the fees the seller pays. Sellers have to inflate their price not just on Amazon, but also across the rest of the internet.”

The novel argument is expected to be a tough one for the agency.

FTC filed an antitrust case against Amazon on Tuesday. (Paul Sakuma/AP Photo)

Antitrust law, designed to protect consumers through open competition, regards low prices as evidence that consumers' interests are served. While the agency admits that Amazon's policies push sellers to offer their products at the lowest prices on Amazon, it argues Amazon’s prices never dip as low as they would in a genuinely competitive market.

The company’s scale, the FTC claims, ensures that some sellers must sell on Amazon.com to survive. And with the market cornered, it slowly increased fees charged to sellers for each sale, according to the agency.

“The consequences of that are very serious for sellers who now pay one out of every $2 to Amazon,” Khan told CNBC. “So this is effectively a 50% tax that businesses pay to Amazon to reach shoppers. And that, in turn, leads prices and it inflates prices across the internet.”

The FTC says Amazon is illegally monopolizing two markets: online superstore retail — where consumers shop for products — and online superstore retail services — where sellers list, sell, and ship their items.

Amazon responded to the FTC’s complaint saying the agency's theory is wrong.

“The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store," David Zapolsky, Amazon senior vice president of global public policy and general counsel, said in a statement.

"If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small businesses — the opposite of what antitrust law is designed to do.”

At Amazon's request, portions of the FTC's claims were redacted from the publicly filed version of its lawsuit. In her interview on Wednesday, Khan said the complaint contains direct evidence of Amazon hiking prices and steadily increasing fees charged to its third-party sellers.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.

Judge assigned to US antitrust case against Amazon recuses himself

Reuters
Wed, September 27, 2023 



(Reuters) - The judge assigned to the U.S. Federal Trade Commission's antitrust lawsuit against Amazon.com has recused himself from the case, according to a court document filed on Wednesday.

Senior Judge John Coughenour was assigned to the case on Tuesday, when the antitrust lawsuit was filed against Amazon in federal court in Seattle. Coughenour, an appointee of Republican former President Ronald Reagan, did not cite a reason for dropping off the case in the court filing.

The case has been re-assigned to U.S. District Judge John Chun based on rotation, according to the document.

Chun was nominated by President Joe Biden last year. He was previously a judge for the Washington State Court of Appeals.

The FTC in its lawsuit accused Amazon of abusing its power in the retail market as an ecommerce giant by unfairly giving preference to its own products and punishing merchants that want to sell products for lower prices on other platforms.

Amazon is facing a series of similar but smaller private consumer cases filed in recent years that are pending in the same U.S. federal court with Judge Ricardo Martinez and the FTC has argued its case should be assigned to the same judge to avoid duplication or conflict.

(Reporting by Abhirup Roy and Mike Scarcella; Editing by Leslie Adler)

Factbox-Amazon antitrust lawsuit latest in US efforts to rein in big firms' clout

Reuters
Wed, September 27, 2023 


(Reuters) - U.S. antitrust regulators on Tuesday filed a lawsuit against Amazon.com accusing the online retailer of harming consumers with higher prices, the latest in a long history of tough action against monopolies that can be traced back to the breakup of Standard Oil.

More recently, Federal Trade Commission (FTC) regulators have targeted Big Tech including Alphabet's Google and Meta Platforms' Facebook.

Here is a list of attempts by regulators to split up big companies:

Standard Oil (1911)- Regulators alleged John Rockefeller's Standard Oil held the monopoly in the oil business by using aggressive pricing to eliminate competition. Standard Oil was broken up into 34 companies. Some of these independent firms now include ExxonMobil and Chevron.

Aluminum Company of America (Alcoa) (1945)- The Justice Department charged Alcoa with illegally monopolizing the aluminum market and demanded the company be dissolved. The case lasted years and the government sold aluminum production plants built during the war to Reynolds Aluminum and Kaiser Aluminum, creating a competitive market.

Paramount Pictures (1948) - The U.S. Supreme Court ruled in a landmark antitrust case, also known as "Paramount case" or the "Hollywood antitrust case," that film studios could not legally own their own theaters, hitting the vertical integration of companies. It forced Paramount to cleave theaters from the studios.

IBM (1982) - The U.S. government initiated an antitrust investigation into the dominance of IBM that lasted for 13 years. The case was later withdrawn and the IT software and services provider remained intact.

AT&T (1984) - In 1974, the U.S. government filed an antitrust lawsuit against AT&T because it had a monopoly on telephone lines. After eight years of litigation, the two sides reached a settlement that led to AT&T giving up control of its regional operating companies, or "Baby Bells".

Microsoft (2001) - A U.S. District Judge ordered a breakup of the company over antitrust claims but appellate judges rejected it. The Justice Department and Microsoft reached a settlement in November 2001.

Meta Platforms (2023) - An appeals court ruled in favor of Meta by refusing to revive a lawsuit filed by states against its Facebook unit over alleged antitrust law violations.

Both the FTC and the states had asked the court in 2020 to order Facebook to sell Instagram, which it bought for $1 billion in 2012, and WhatsApp, which it bought for $19 billion in 2014.

(Reporting by Jaspreet Singh and Zaheer Kachwala in Bengaluru; Editing by Sriraj Kalluvila and Josie Kao)

Factbox-FTC's Amazon complaint zeros in on seller prices, logistics

Reuters
Wed, September 27, 2023 


WASHINGTON (Reuters) - The U.S. Federal Trade Commission filed a lawsuit against Amazon.com that accused the online retail giant of overcharging customers and independent sellers on its platforms as the $1 trillion company sought to illegally maintain monopoly power.

These are the specific allegations included in the FTC's 172-page complaint:

ONLINE SUPERSTORE, SERVICES MONOPOLIES

*The agency alleged that Amazon had a monopoly in an online superstore market. In 2021, Amazon had 77% of the market, Walmart had 13% and Target 2%.

*The agency also said that Amazon had a monopoly in the online marketplace for services, where Amazon has more than 70% of the market. The FTC said that more than 160 million people in the United States visit Amazon's website each month.

PUNISHES SELLERS FOR LOWER PRICES ELSEWHERE

* The complaint alleged Amazon uses a sophisticated network of web crawlers that identify which of its sellers offer their products more cheaply on other platforms. Amazon allegedly punishes those sellers, who make up about 60% of Amazon's sales, by making them harder to find on its platform.

"Because Amazon's anti-discounting conduct punishes sellers who offer lower prices at rival online stores with lower fees, many sellers set their price on Amazon- high fees and all - as the price floor across the internet," the FTC said in the complaint.

REQUIRES USING AMAZON LOGISTICS

* Amazon requires sellers under Amazon's Prime feature to use the company's logistics and delivery services even though many would allegedly prefer to use a cheaper service or one that would also service customers from other platforms where they sell.

CHARGES HIGH FEES

*The complaint alleges Amazon raised average fulfillment fees to sellers about 30% between 2020 and 2022, as well as requiring them to pay for referrals and advertising. The FTC alleged that between sellers paying for search placement, fulfillment and other charges that Amazon takes nearly half of what sellers make on their sales.

MONITORING PRICES

* Amazon used the Project Nessie pricing system as an unfair method of competition. A description of Project Nessie was heavily redacted. An Amazon blog described it as "a system used to monitor spikes or trends on Amazon.com."

(Reporting by Diane Bartz; Editing by Jamie Freed)

The FTC just hit Amazon with a major antitrust lawsuit


Taylor Hatmaker
Tue, September 26, 2023

Image Credits: Sheldon Cooper/SOPA Images/LightRocket / Getty Images

The Federal Trade Commission made its big move against online shopping giant Amazon on Tuesday, accusing the company of illegally stifling competition on its way to becoming a ubiquitous retail presence and one of the world's most valuable companies.

Attorneys general from 17 states joined the FTC in the lawsuit, alleging that Amazon leverages a "set of interlocking anticompetitive and unfair strategies" to maintain a monopoly. The states that signed onto the FTC's action are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.

"The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them," FTC Chair Lina M. Khan said. "Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition."

Amazon predictably pushed back against the FTC's allegations, which could amount to an existential threat to the company's market dominance.

"If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do," Amazon General Counsel David Zapolsky said. "The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”

The FTC and its state partners allege that Amazon has violated antitrust law in two distinct areas: its vast online storefront for shoppers and its seller-side marketplace. Amazon's practice of punishing sellers that offer lower prices away from Amazon and its strategy of aggressively funneling sellers toward obtaining Prime status for their goods are among the anti-competitive tactics the FTC named in the lawsuit.

"Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers," Deputy Director of the FTC Bureau of Competition John Newman said. "Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people."

The FTC accuses Amazon of 'monopolistic practices' in long-expected antitrust suit

It claims the retailer prevented vendors from selling products for less elsewhere.

Will Shanklin
·Contributing Reporter
Tue, September 26, 2023


The Federal Trade Commission (FTC) filed an antitrust lawsuit against Amazon today in Western Washington district court, with 17 states joining the federal agency. The case isn’t surprising (the FTC was reportedly nearly ready to file in late August), but its specifics weren’t yet known.

The FTC accuses the online retailer of monopolistic practices, including preventing merchants from offering lower prices on other platforms and forcing them to use Amazon’s logistics service if they wanted to be included in customers’ Prime shipping perks. Those anticompetitive practices allegedly led to higher prices and an inferior shopping experience.

The suit describes “Amazon's one-two punch of seller punishments and high seller fees” that forces vendors to “use their inflated Amazon prices as a price floor everywhere else.” The complaint reads, “Amazon's punitive regime distorts basic market signals: one of the ways sellers respond to Amazon's fee hikes is by increasing their own prices off Amazon.”

“Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition,” said FTC chair Lina Khan, according to The New York Times.



“Amazon is a monopolist,” the lawsuit reads. “It exploits its monopolies in ways that enrich Amazon but harm its customers: both the tens of millions of American households who regularly shop on Amazon's online superstore and the hundreds of thousands of businesses who rely on Amazon to reach them.”

The 17 states joining the FTC include New York, Connecticut, Pennsylvania, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island and Wisconsin.

The FTC has had its eye on Amazon for several years. This is the fourth action the agency has taken against the company this year. Amazon settled a previous lawsuit (for $30.8 million) filed in May over Alexa children’s privacy concerns and snooping with Ring cameras. In June, the FTC sued the retailer again, claiming the company tricked customers into signing up for Prime subscriptions and then made it hard to cancel them.

Amazon claimed that the FTC’s actions are out of line. “Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” said David Zapolsky, Amazon's Senior Vice President of Global Public Policy and General Counsel. “The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”

The media’s narrative about the suit will likely frame it as a long-awaited title bout between Khan and Amazon. The FTC chair gained prominence by publishing a 2017 Yale Law Journal paper arguing US antitrust laws fell short of adequately reining in the tech giant. That helped begin a national conversation about whether the nation’s anti-monopoly laws were prepared to handle modern Silicon Valley behemoths.

But more important than one-on-one championship fight framing, the showdown will serve as a test for Washington regulators and Amazon, as the federal agency tests its authority and the retailer faces its most consequential political fight to date.

FTC, 17 states file antitrust suit against Amazon

Clarissa Hawes

FreightWaves
Tue, September 26, 2023 


The Federal Trade Commission and 17 state attorneys general filed suit against Amazon.com on Tuesday, alleging the e-commerce giant used its monopoly power to “inflate prices, degrade quality and stifle innovation for consumers and businesses.”

The 172-page complaint, filed in the U.S. District Court for the Western District of Washington, alleges Amazon (NASDAQ: AMZN) engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging.”

The FTC lawsuit, which follows a four-year investigation into the Seattle-based company, states that it’s not the size of Amazon that violates the law, but the the company’s alleged “anticompetitive conduct” — which includes its “online superstore market that serves shoppers and the market for online marketplace services purchased by sellers.”

“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” FTC Chair Lina M. Khan said in a statement on Tuesday.

“The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them.”

In the suit, the FTC alleges Amazon has harmed its competition by requiring sellers who want their products to be Prime-eligible to use its logistics platform, Fulfillment by Amazon, which it claims makes it substantially more expensive for sellers on Amazon to also offer their products on other platforms.

Another issue outlined in the FTC suit alleges that Amazon engages in anti-discounting conduct, which “algorithmically punishes sellers” if Amazon discovers they are offering lower-priced goods elsewhere.

“Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible,” the FTC said.
Amazon responds to FTC suit

In a statement, Amazon denied the allegations outlined in the FTC’s lawsuit.

“Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” David Zapolsky, Amazon’s senior vice president of global public policy and general counsel, said in a statement. “The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store.”

In his statement, Zapolsky said: “If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do. The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”

The company has about 500,000 independent businesses selling goods on its platform in the U.S., which have created 1.5 million jobs, Zapolsky said.

He said that since Amazon opened its business model nearly 20 years ago to include third-party sellers, more than 60% of the company’s sales are from independent sellers, consisting mostly of small and medium-size businesses.

“The FTC’s allegation that we somehow force sellers to use our optional services is simply not true,” Zapolsky said. “Sellers have choices and many succeed in our store using other logistics services or choosing not to advertise with us.”

The states included in the lawsuit are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.

Click here to read more articles by Clarissa Hawes.


Amazon has deep bench of defense lawyers to fight US FTC lawsuit

Amazon faces FTC antitrust suit alleging anticompetitive practices


Tue, September 26, 2023 
By Andrew Goudsward and Mike Scarcella

WASHINGTON (Reuters) - The U.S. Federal Trade Commission’s monopoly lawsuit against Amazon.com filed on Tuesday poses perhaps the biggest legal test so far for the platoons of lawyers who have defended the technology giant for years against allegations of antitrust and consumer protection violations.

The long-awaited FTC case against Amazon, joined by 17 state attorneys general, accuses the company of abusing its dominance as an online retailer to thwart competitors and harm sellers and customers that rely on its platform. The company vowed to fight the lawsuit, saying its practices have spurred competition and innovation.

Kevin Hodges, a partner at law firm Williams & Connolly, was the first member of Amazon's defense team identified in a court document in the case. His partner Heidi Hubbard will lead the team, which also includes attorneys from law firm Covington & Burling, according to a person familiar with the hires.

Hubbard and Hodges, who is a former managing partner of the Washington-headquartered firm, are also representing Amazon in an ongoing antitrust lawsuit by California's attorney general accusing the company of forcing artificially high prices on consumers.

Williams & Connolly, known for its focus on litigation, in April successfully defeated a separate private lawsuit accusing the company of curbing competition for shipping and fulfillment services.

Hodges represented state attorneys general who joined the U.S. Justice Department's historic antitrust case against Microsoft in the 1990s and defended BP in lawsuits following the 2010 Gulf of Mexico oil spill, according to court records and his firm's website. He did not respond to a request for comment.

Williams & Connolly is also a lead defense firm in another major antitrust case targeting Big Tech. Partner John Schmidtlein heads a team comprised of several big law firms defending Alphabet's Google in an ongoing landmark trial over the company’s alleged monopoly power in online search.

An Amazon spokesperson did not immediately respond to questions about its legal team. The company is likely to rely on multiple law firms to defend the FTC case.

Amazon General Counsel David Zapolsky, a 24-year veteran of the company's legal department, can turn to a stable of top outside law firms that already represent it.

Covington & Burling, another major Washington firm, worked with Williams & Connolly in 2021 in an unsuccessful attempt to force FTC Chair Lina Khan, a vocal critic of Amazon, to recuse from matters involving the company. Thomas Barnett, co-chair of the firm’s antitrust practice and a former senior Justice Department official, was involved in the effort.

Covington is also representing Amazon in another pending lawsuit brought by the FTC accusing the company of enrolling customers into its paid Amazon Prime service without their consent and making it difficult for them to cancel. The company has denied the allegations.

Covington advised Amazon in two consumer privacy settlements with the FTC in May related to the company’s Alexa voice assistant and Ring home security service.

A Covington spokesperson did not respond to a request for comment on whether the firm is defending Amazon in the FTC antitrust case.

Amazon has also turned to U.S. law firm Paul, Weiss, Rifkind, Wharton & Garrison to navigate government scrutiny. Paul Weiss secured the dismissal of an antitrust lawsuit brought by Washington, D.C.’s attorney general. An appeal remains pending.

The firm joined Covington in negotiating a $25 million Alexa child privacy settlement with the FTC.

(Reporting by Andrew Goudsward and Mike Scarcella in Washington; Editing by David Bario, Matthew Lewis and Marguerita Choy)