Antitrust 101 for culture workers

30:26It makes sense that she would be a really attractive target. Right. And indeed, we've seen like the Wall Street Journal editorial page writing something like 85 different editorial pages about how terrible she is.

31:09Oh, my God. surprising until you saw her speak and saw how credibly she presented her ideas as not rooted in any partisan political understanding in a basic principles of good government and of the public interest. So it's like on that level, it makes sense that she's just uniquely threatening in a way that like somebody like John Cantor over at Department of Justice, whose ideas are not all that different, you know, he's like a white man who's worked with corporate clients in his own private practice in the past, right? And so it's like, looks more like the establishment. So I think that some part of it is about that.

31:49I can't imagine that also like the big monopolies who some of her work obviously stands to impact aren't particularly happy about this. Oh, no, they have argued in court. So for example, Amazon, and I believe Facebook as well, has argued in court that she should be forced to recuse herself from any matters regarding their companies because she wrote papers about them while she was in law school, right? That somehow she's unable to do her job because of a paper that she wrote at school. And it's partially so. Like, Lena coming up at the FTC coincided with a range of aggressive antitrust legislation that was under consideration in Congress.

32:31Some of it still is. Um, so there was like an incredible level of investment from many of the firms that had the biggest targets on their back, Amazon, Facebook, Google, um, you know, more generally the chamber of commerce, the level of investment in pushing back on this new wave of antitrust, like just huge piles of lobbying resources being poured into these fights. Because for years, those companies were used to being left totally alone, right? They were used to sort of getting away with almost anything that they wanted and making their own rules, right? The kinds of antitrust suits that are now really relatively commonplace in the headlines, there was decades where that just was not happening.

33:22And so, yeah, corporations are freaked out, especially the corporations that have had this position of unchallenged dominance for so long. So zooming out beyond the work that Lena's doing, what are some of the big policy fights that really could materially change the lives of musicians and other creatives that we should be paying attention to, particularly in regards to some of this antitrust stuff? Sure. So there's these big tech bills and some of them are still out there to address the problems of concentration in the ad tech environments to allocate additional enforcement authority. One of the big battles right now is just making sure that these agencies have the adequate amount of resources to fight on behalf of the American people to go after misbehavior.

34:15That's something that came up this week in the appropriations fight before the Senate. and is one of the, like, to go after Amazon or Ticketmaster requires a lot of lawyers with a whole lot of time and resources. And one of the strategies that corporations have used to evade scrutiny is to just keep the agencies on a shoestring budget as much as possible, right? I think that one piece of legislation that I'm especially excited about is the Protecting Working Musicians Act, which is sponsored by Deborah Ross. That creates an antitrust exemption that allows for independent musicians who control some part of their own catalog to negotiate directly with streaming services or dominant AI firms for the use of their work, right?

35:22So as it currently stands, one of the reasons that terms and rates from dominant streaming platforms are so terrible is that basically don't even have to negotiate with independent musicians. They basically can present terms as sort of get or leave it. The larger firms like Universal and Sony have at least some, through their market share, have some countervailing negotiating power so they can push back and negotiate to make things work a little bit better for their business model. But the little guys don't have that power, even though increasingly they command the same kind of market share. And the reason is under the prevailing interpretation of antitrust law, there's what's called the firm exemption.

36:13Like a company that controls 30 % of the marketplace can negotiate on behalf of that company. So like Universal can negotiate with Spotify, but independent musicians aren't one firm, right? So they might also control 30 % of the marketplace, but if they tried to have their catalog from a service because they were collectively unhappy with the terms that they were presented, if independent musicians got together and said, oh, we don't like Spotify's terms, we're going to take our music off that service and go somewhere that pays us better, they would risk being sued as an illegal cartel under the antitrust laws under this earlier provision, earlier interpretation of antitrust like.

37:06So the Protect Working Musicians Act just sort of fixes that and makes it clear that musicians working together for the purpose of collective bargaining with these dominant firms are within the rights to do so, right? And that could be potentially really transformative for what digital music looks like moving forward. Isn't that kind of similar to how freelance journalists often are not covered by unions unless they worked for a unionized shop before, and they're not really allowed to form a union, I guess? And unlike, for example, the Hollywood writers who can do that even if they're freelance.

37:48Okay, so there's like two simultaneous things going on, two points of connection that you just made. So is that while we have some good unions in music, we have SAG-AFTRA, which represents vocalists, and we have the American Federation of Musicians, which represents instrumentalists. They only have the ability to negotiate on behalf of their members in a context where they're dealing with a signatory company, right? So SAG-AFTRA and AFM can negotiate with a film studio. They can negotiate with a major record label, but they don't have a contract with Spotify. The relationship between a musician and Spotify is a licensing relationship rather than a labor relationship, right?

38:39So there's a need for other forms of collective bargaining outside of the traditional union relationship to be able to force an entity like Spotify to the bargaining table just because of that licensing difference. And there are similar challenges in journalism about who is eligibility for membership in News Guild or CWA. or WG, the various unions that represent different kinds of journalists. And there are other unions and guilds that have formed to fill some of those gaps. But there is a similar structural problem in that there is a collective bargaining problem between the field of journalism and social media companies that are licensing work from journalists, right?

39:36And that is part of what is driving the extraction of value been that there's no ability by journalism outlets to collectively bargain, right? So maybe the New York Times has some leverage to be able to negotiate with Facebook or the Washington Post does. There isn't the ability to collectively negotiate across the field of journalism to achieve better terms and conditions in those licensing arrangements that would hopefully be more remunerative and send more money back into journalism and hopefully back to journalists themselves, right? And so there is a piece of legislation called the Journalism Competition and Preservation Act, similar to the Protecting Working Musicians Act, is structured as an exemption to the existing antitrust laws to explicitly allow for that kind of collective bargaining activity to take place.

40:35Yeah, that was actually my next question. If you could explain a little bit more about how that act in the California Journalism Preservation Act work and also why there isn't more conversation about them or why they're seemingly polarizing. I can't quite wrap my mind around what all the different nuances are. So the JCPA was introduced by Senator Amy Klobuchar and John Kennedy, a Republican from Louisiana. It's bipartisan legislation. It has the support of, broadly, most of the journalism outlets. The idea is basically that news organizations need to be able to negotiate on a loving field with the online platforms that today are dominating news distribution and digital advertising.

41:30The idea is that with the ability to band together and negotiate for compensation from those, from fair compensation from Google and Facebook, they would have the ability to continue to profit from the journalism content that they're creating. And it's done on the basis of annual sales or market capitalization. So greater than $550 billion or like a billion active monthly users, like the big companies like Google and Facebook, they are required to negotiate in good faith with news organizations. And they lose the ability to suit those journalism joint negotiation entities as being like cartels if they don't like the way that the negotiation, the arbitration is going, right?

42:24Obviously, Google and Facebook hate this. They have been joined in their opposition by a few different stakeholders, some of which might be surprising. There are some in the journalism and media reform community that has said, we don't like this because it's helping big corporate journalism, which we don't like, Right. Like this would help Rupert Murdoch. This would help the companies that, you know, that they correctly say have been driving so much of the consolidation in journalism, have been stewards of the journalism field in so many ways. And I am sensitive to those critiques. They're not wrong about that.

43:10But nonetheless, those companies have, I think, a fair grievance against Google and Facebook at this point. Right. The federal level, they have as well, like News Guild, the union that represents newspaper journalists, has not gotten on board with the JCPA yet for a complicated set of reasons. But what they have wanted, I think, is there's the House version of the bill and there's the Senate version of the bill, and they want a version to advance that does a little bit more to ensure that this new money that's flowing in from Facebook and Google makes it to journalists and doesn't just go to the owners, right?

43:53Which I think is a fair critique. Now, so if you look at the California version of the bill, it goes a little further that direction and includes some of those provisions, ensuring that in California news publications, negotiations with large tech firms, that that money does indeed go to journalism, to actual journalists. There's more explicit protection in there. And as a result of that, my understanding is that the California News Guild is explicitly supportive of the California version of the JCPA. We're just not there yet federally. But why haven't we heard more about this? I think part of it is that dynamic, right?

44:38That there has been, in some cases, a reluctance to directly criticize the activities of Facebook and Google. Those companies have proactively invested money in journalism, created relationships of dependence, right? It's sort of an exercise of soft power. It's not so much that I think that they've just corrupted or captured the publications, but there's a way that they've sort of exercised, been very smart and tactical in using the resources that they have to dodge regulatory measures like this one. And they've also just been very smart and tactical as well in their funding and support of various technology policy watchdog organizations.

45:31You know, I don't think that there's some good faith critiques of the JCPA, but I think there's some less reasonable critiques of the JCPA. So one of the things that Google has done is propagated the notion that the JCPA would amount to some sort of expansion of copyright. And that really isn't the case, but they've had a lot of success in framing their preferred public policies as opposition to overly expansive copyright protection in the past. And so they're trying to perpetuate that strategy. And then part of it is just like, Most public policymaking is slow. Media policy is especially slow.

46:11And we've lost so much resources in journalism. Coverage of slow moving, complicated policy issues is exactly the kind of stuff that has been lost. Right. And so this becomes self-perpetuating. It's also part of why we started this podcast is because it can be so, so hard to even like sell stories about this stuff because it does. You know what I mean? It doesn't always have a salacious hook or whatever. Oh, totally. Like, you know, I can talk about this stuff with sympathetic journalists who are at like major music publications and they can be totally interested and like can't get can't get an editor to approve it because they can't demonstrate that that's the kind of story that's going to get enough clicks for them to be able to invest the amount of time that it would take to explain.

47:03Because, yeah, and precisely because of the same issues that, you know, an act like this is speaking to. Exactly. Yeah. Kevin, you talked about soft power a little earlier. There is a little bit of hard power happening here too, though. I wanted to bring up, there's a little bit of a precedent for this that happened in Australia. I think it was called the New Media Bargaining Code that they introduced. And if I understand correctly, Facebook or Meta actually temporarily just banned all news from the platform in response to that because they hated it so much. That happened in Canada as well. Yeah.

47:41So not soft power, like very high power, which is like crazy to think about. Yeah. Right. And it's certainly like when a company engages in that kind of exercise of its platform power and demonstrates its ability to effectively shut down news distribution. For me, anyway, that amplifies my concern. Right. I remember when Spotify in, I think it was Uruguay, was going to be required to pay out an additional royalty, they decided they were just going to pull out of Uruguay entirely and essentially made that threat. And ultimately, the lawmakers responded by shifting the burden of that royalty to rights holders instead of the service itself.

48:28But it's definitely playing from that playbook. And that playbook itself is, you know, for a company to be able to make that move, to be able to exercise its gatekeeper power over our communications infrastructure to achieve a desired public policy response, is itself a pretty vivid indication. that that company has way too much power. Do you think that they do this because they think that the amount of money that they would lose would be too significant to keep operating as in like they generate so much revenue from media that they would have to part with a lot of money? Or is it like, oh, this is just isn't worth the trouble and it's not enough money to worry about.

49:12It's kind of hard to tell. That's a great question. I would say with a market like Australia or Canada, I think that they were trying to avoid a precedent that they correctly surmise would then get picked up by other countries, right? And I don't think it would represent anything like an existential threat to the company, but it might require some serious changes to the fundamental business model, changes that they would certainly be able to survive. But when you are used to making all the rules kind of unilaterally, when you're so used to getting your way and not even really having to negotiate or just like every negotiation is based on a massive power asymmetry, nothing is more frightening than a level playing field, right?

50:02they're certainly spending a lot of money to avoid this happening like tens of millions of they're spending a lot of money to try to prevent this from going through i think that that under itself should make people want to start paying attention to it the stakes are high the stakes are very high everyone should look this act up yeah the stakes are high there's a great graph that i think it was josh marshall from talking points memo put out yesterday on on twitter that yeah we were talking about that yeah just showing just how dramatic the loss of advertising revenue over a relatively short period of time has been i get frustrated sometimes because there are we have friends in the media reform community at other organizations that are looking at some of these issues and just sort of saying oh well the solution is to just divorce journalism from capitalism entirely and focus on nonprofit models and focus on other sort of forms of investment and focus on support for public media.

51:07And I would love to see additional investment in public media. I would love to see a flourishing of alternative and nonprofit publications. I'm not particularly a fan of what capitalism does to public interest incentives. And at the same time, it just seems so profoundly clear that the idea that non-profit alternatives could make up for the amount of loss that we've seen, for the amount of extraction we've seen happening as private equity has taken over. There has to be a way that we can restore a public policy regime that allows for those kinds of nonprofit alternatives to flourish, but also reestablishes some of the healthy, competitive media ecosystem dynamics that could make good journalism align with market-based incentives, right?

52:09We can't put all that weight on philanthropy alone. Yeah. And I think about this in the context of when we talk about alternative visions for music streaming as well. Sometimes people float that idea of like, let's get like a nonprofit streaming service together. And I think that's a wonderful idea. For that to work, how many billions of dollars would you need to be able to sustain the amount of artists that you need to? How do you square that with the fact that our entire federal spending budget for the arts across all disciplines right now is stuck at around$200 billion? And that's only because the Biden administration has brought us up to the highest level of investment of all time.

52:54And in spite of that, we're still here. Right? Like we're still at this embarrassingly low level of federal support, even as every arts advocate every year goes back fighting tooth and nail to preserve that budget line item for the National Endowment for the Arts, right? The idea that we're going to be able to get to a place of like a billion dollars a year, even for a government funded streaming service, like we just, it's just not good. I imagine that a lot of people will want to turn to nonprofit alternatives while we're trying to figure out where media goes next and to insulate themselves from these problems.

53:30But the problem is still there and we're going to have to address it at some point. Right. And it's sort of like all of these things that there isn't ever going to be any one silver bullet. It takes a holistic approach to looking at all of the range of potential interventions in tandem. It takes a multi-agency approach, a whole of government approach. It's like steering a really big ship. And sometimes the individual interventions might seem really small, but cumulatively they can add up to a lot.

54:13An interesting thing about the music industry, and one of the reasons I love covering it, Emily loves covering it, is that really it's often a canary in the coal mine for issues that go on to have much wider scale implications for society as a whole. Look at, for example, like freelance labor, sexual misconduct, piracy, and streaming. Those are just like a few that come to mind that kind of hit music first and then hit everyone, right? Right. I think of the old Fugazi song, Five Corporations, like warned about the consolidation of like the music industry into just five major labels. Now we only have three major labels.

54:52Yeah. But like, then that happens to the rest of the economy too, right? A hundred percent. Yeah. I know Obama's former economic advisor, this awesome Princeton economist, he used to actually have a conference of economists. Oh, Alan Kruger. Yeah. Yeah, Alan Kruger. Yeah, yeah, yeah. I got to work with him a little bit. And I spoke at that conference once and it was fascinating to me because it was all of these very serious economists from across the spectrum. And they would just get together and talk about what's happening in the music industry because it was such an excellent predictor of kind of what were going to be the sort of massive trends or impacts happening next just across all industries.

55:34So I bring that up because Emily and I have both been wondering with that kind of framing, tell us a little bit about what's going on tickets right now and what might that pretend for the bigger picture? Oh, yeah. I mean, that is a great example. And it's funny because I was just pulling together a policy memo from the Kruger book, Rockonomics. Uh-huh. Great book. Yeah. Yeah. It's a great example of looking at the data and changing your mind. It's what we hope for for elected officials and the sort of economic establishment that has sort of spent a long time not really talking to workers or engaging with their experience directly.

56:16Take a moment to look at the data and then talk to a whole lot of working musicians, ideally from diverse backgrounds, and then adjust your thinking on that basis. And I appreciated in his book, Kruger really kind of modeled that shift. So I talked before about, we feel like there's sort of two villains, right? Or we've got two big problems. We've got a structural problem. Too few companies have too much power. In this case, it's like Live Nation, Ticketmaster, controls a whole lot of the market, the ticketing as well as the venues. After that, But AAG is not that terribly far behind. And there's a bunch of dysfunction that flows from that structural concentration, that ownership concentration piece.

57:01And then there's also a market regulation problem. There's a whole bunch of behaviors that are happening in the marketplace that have been driven in part by the downstream impacts of ownership consolidation, but have also been driven by the failure of government at all federal, state, and municipal levels to step up and do their job as regulators. So bad practices have come to dominate, right? And those are driven by the rise of extractive business models, like those propagated by StubHub, Vivid Seats, SeatGeek. Their entire business model is about maximizing their access to inventory, getting as many tickets as they can for the high demand events, reselling those tickets for as much as they could possibly get, trying to extract as much value out of the live music ecosystem from anybody that had anything to do with actually putting on a live music event and funneling that money out of consumers' pockets to their investors, which themselves are largely private equity firms, right?

58:12So yeah, that is exactly what we're seeing in the rest of the economy. We're seeing a concentration problem that hasn't been addressed for a long time. There was an attempt when Ticketmaster and Live Nation merged, there was an attempt to implement what's called a consent decree where the Department of Justice said, we're going to make you follow these rules, which they did not follow. And that consent decree has extended multiple times because the Department of Justice found evidence that they were not following those rules. But even those rules themselves, those behavioral conditions that they put onto that murder to allow it to go through, have been totally inadequate in curtailing the harms that followed from that level of ownership concentration.

58:53That's what we're seeing across the economy. We're also seeing bad behavior run amok because there has not been clear rules of the road put in place, right? So the interventions here are pretty straightforward. You get the Department of Justice finally to show up and do their job and address the structural problem. And my understanding is that there is at the Department of Justice currently an investigation underway that could ultimately result in a suit that breaks up the Live Nation Ticketmaster merger, but hopefully we'll go even further than that and call for the structural separation between all their different lines of businesses.

59:36So they're not one company doing ticketing, venue ownership and operations, artist management and sponsorships, but each of those lines of business should be its own thing and allow for healthy competition in each of those businesses. And at the same time, we're hoping to see some strong rules of the road to address some of the behavioral dysfunction that's coming from Ticketmaster itself, sure, but also from StubHub, Vivid Seats, SeatGeek. So that can happen through legislation, but can also happen through rulemaking. So the Federal Trade Commission is currently in the process of a rulemaking dealing with the issue of junk fees, which includes ticketing fees.

1:00:22What they want to require is transparency up front so you see the total price of the ticket. You don't get hit with these surprise fees at the end. Additionally, we've called for, at the federal level, through the Fans First Act, which is the federal ticket market regulation that's backed by all the artist organizations, arts nonprofits, as well as the National Independent Venue Association, consumer reports. It's the broadest coalition that has ever existed for a piece of ticketing legislation. So that will address some of the issues like deceptive websites that are meant to trick people into paying way too much for tickets.

1:01:04We'll address the problem of speculative tickets, which is just astonishing that it's even legal. The idea that you go to StubHub and they're selling you a ticket that they don't even possess. The assumption that the broker that's selling it, it's going to be able to obtain one and be able to deliver it and charge you a whole bunch of extra above the face price. So we're hoping to get stuff like that banned. So these are the same kinds of problems that are happening in every part of the economy. You've got structural problems that have to be addressed by structural interventions, like breaking up the companies that are too big and powerful.

1:01:40And you've got a need to apply clear rules of the road to every company that's operating in space. The other thing that we can learn from this is why it's so difficult. Part of why it's so difficult is we are at a significant disadvantage that artists and workers generally have not been at the table in so long, that there's a steep learning curve. So for even well-meaning attorneys at the Department of Justice and state attorneys general to get them up to speed on how the industry actually works in practice rather than in theory. To understand how the competitive dynamics work in practice, not just in theory, has required a slow and deliberate process of trying to get as many artists comfortable with showing up at the table and sort of demanding our place at that table.

1:02:38Which I think on a meta level, like makes it all the more resonant and vital to pay attention to, because that really speaks to the average person's challenge with maintaining some kind of agency or understanding with all of this stuff, right? Yeah, absolutely. And ticketing potentially is going to be a really interesting test case for how seriously this shift that's happening in the antitrust field towards responsivity to workers is really, whether that's really going to take hold or whether that's just window dressing, right? So we have had to, in pushing back on those secondary companies that are trying to appropriate everybody's frustration with Ticketmasters and enact their own policy agenda, the musician community has had to invest a lot of time and resources and doing a lot of handholding, frankly, with antitrust folks and anti-monopoly folks to understand the difference between what we've experienced and these bad faith appropriations of like, you know, there are so many AstroTurf organizations out there claiming to be representing the interests of fans or music consumers or ticket buyers.

1:03:50There's like five or six different ones, and they're all funded by StubHub or Vivid Seats or SeatGeek or the National Association of Ticket Brokers, right? And they're using this like, oh, let's break up Ticketmaster. And then in the fine print, you see what they really wanted to do, right? And it's only through helping get elected officials, regulators, and enforcers the tools and the relationships that they need to be able to effectively see through that bullshit. It's only through that slow process that we actually get to the policy. And maybe that's the biggest meta lesson for me is that to get to policy that protects consumers, you have to center the voices of impacted workers.

1:04:40For me, that's always been intuitive because I've always felt like the interests of musicians and fans, ultimately, even if we're on different sides of the economic transaction, we're really aligned. We want to create a healthy, sustainable music ecosystem and cultural ecosystem that works well for everybody, which includes healthy music journalism institutions, healthy community radio stations, includes the whole ecosystem. But the idea that consumers and workers' interests are fundamentally aligned, there's still some catching up economy-wide to get to that place. There have been, especially in technology policy, the interests of consumers and workers were really pitted against each other for a long time.

1:05:27I think journalism is another field where the alignment of interests is really, really obvious and really, really clear for anybody that's operating inside of it. And yet, when I think about the digital media and technology policy and journalism policy fights of the past two decades, I really think of a lot of moments where, again, the interest of consumers was really defined in terms of low price and less with an eye towards what the downstream impact of sustainable wages for journalists versus a life of endless precarity for journalists would be on news consumers. What do you say to somebody who wants to stay on top of this stuff, especially like the antitrust stuff, and doesn't really know where to start?

1:06:19Maybe you're artists who are listening, musicians, journalists, you know, who just want to be able to wrap their heads around this stuff more? And how can they get involved or take action? In addition to some of the specialized organizations like mine that focus on the anti-monopoly issues as applied to music, I think it's important to engage with some of the organizations that are looking at these issues across the entire economy. And so there's a few that I would follow. I would follow Open Markets Institute. I would follow the American Economic Liberties Project. I would follow the Institute for Local Self-Reliance, for example.

1:06:55They're all doing great work at connecting this growing anti-monopoly movement to all the different ways that manifests itself across the economy. There's some great sort of primers that are helpful to read to get your head around that growing movement. One that I really like is called Monopolies Suck. To the point. It helps you remember the title. But it's written by Sally Hubbard, who's I think currently an attorney at the Department of Justice. It makes the conceptual piece of this stuff really immediate and accessible for sort of an intellectual history of how we got here. Tim Wu's book, The Curse of Bigness, is a good resource.

1:07:41And in terms of how we got here, in terms of the problems with internet and technology policy up till now, there's a book that actually came out a decade ago that I consistently still recommend to everybody. It's by Astra Taylor, and it's called The People's Platform. She's brilliant, and she kind of anticipated a lot of the current debates about technology platform power that we're all wrestling with. And her framing historical account of how we got to this place is a really helpful contribution. That's awesome. Definitely going to check all those out. Well, Kevin Erickson, thank you so much for your time.

1:08:21These insights have been illuminating and we're excited to share them and grateful for the work that you do. Oh, thanks so much. I appreciate the opportunity.

1:08:36This episode of The Culture Journalist was produced and edited by Emily Friedlander and me, Andrea Dominick. Our theme music is by Mark Donica. To check out some really excellent information and reading recommendations from Kevin on all of this antitrust stuff and more, head to our Substack. That's theculturejournalist.substack.com. And if you like what you're hearing, leave us a rating or review on Apple Pods or share us with friends to help support independent journalism.