The Return Of The Company Town

February 20, 2012

Dollar Collapse

By John Rubino

The US government’s obliteration of the Bill of Rights via the Patriot Act, the recent defense bill that allows the military to detain citizens indefinitely without trial, the health care law that forces citizens to buy insurance, and the attempted takeover of the Internet through SOPA and PIPA has gotten a lot of attention lately, and in a few rare cases has generated some effective push-back.

But according to an article in this month’s Harper’s Magazine (Killing the competition: How the new monopolies are destroying open markets, by Barry C. Lynn), US corporations are evolving into forms that are more threatening to their victims than anything emanating from Washington. As the author characterizes it, a new generation of monopolists are imposing their own private governments on their industries — and not always the industries one would expect. This long, detailed article should be read by anyone with a desire to understand how the US is evolving. Here I’ll highlight a few excerpts to summarize the major plot points:

Silicon Valley
Just a few years ago a software engineer’s talents were almost completely portable, allowing a programmer to move effortlessly between tech companies. In other words, there was a functioning market for talent in which the individual had power and choice vis-à-vis local employers. Then a handful of companies began to accumulate near-monopoly control over their product lines — and their workers.

Book Publishing
But perhaps the best way to understand the true structure of America’s political economy in the twenty-first century is to talk to some of the people who publish, edit, and write books in America. These days, most articles on the book industry focus on technology. The recent death of the retailer Borders is depicted as a victory of Internet sales over brick-and-mortar stores, the e-book market as a battle between the Kindle e-reader and the iPad. But if we look behind the glib narrative of digitization, we find that a parallel revolution has taken place, one that has resulted in a dramatic concentration of power over individuals who work in this essential, surprisingly fragile industry.

A generation ago, America’s book market was entirely open and very vibrant. According to some estimates, the five largest publishers in the mid-1970s controlled only about 30 percent of trade book sales, and the biggest fifty publishers controlled only 75 percent. The retail business was even more dispersed, with the top four chains accounting for little more than 10 percent of sales. Today, a single company—Amazon—accounts for more than 20 percent of the domestic book market. And even this statistic fails to convey the company’s enormous reach. In many key categories, it sells more than half the books purchased in the United States. And according to the company’s estimates, its share of the e-book market, the fastest-growing segment of the industry, was between 70 and 80 percent in 2010. (Its share of the online sale of physical books is roughly the same.)

Not surprisingly, then, we find the same sort of fear among our book publishers as we do among the chicken farmers of the Sweedlin Valley. I recently sat down with the CEO of one of the biggest publishing houses in America. In his corner office overlooking a busy Manhattan street, he explained that Amazon was once a “wonderful customer with whom to do business.” As Jeff Bezos’s company became more powerful, however, it changed. “The question is, do you wear your power lightly?” My host paused for a moment, searching for the right words. “Mr. Bezos has not. He is reckless. He is dangerous.”

Later that same day, I spoke with the head of one of the few remaining small publishers in America, in a tattered conference room in a squat Midtown office building. “Amazon is a bully. Jeff Bezos is a bully,” he said, his voice rising, his cheeks flushing. “Anyone who gets that powerful can push people around, and Amazon pushes people around. They do not exercise their power responsibly.” Neither man allowed me to use his name. Amazon, they made clear, had long since accumulated sufficient influence over their business to ensure that even these most dedicated defenders of the book—and of the First Amendment—dare not speak openly of the company’s predations.

If a single event best illustrates our confusion as to what makes an open market—and the role such markets play in protecting our liberties—it was our failure to respond to Amazon’s decision in early 2010 to cut off one of our biggest publishers from its readers. At the time, Amazon and Macmillan were scrapping over which firm would set the price for Macmillan’s ebooks. Amazon wanted to price every Macmillan e-book, and indeed every e-book of every publisher, at $9.99 or less. This scorched-earth tactic, which guaranteed that Amazon lost money on many of the e-books it sold, was designed to cement the online retailer’s dominance in the nascent market. It also had the effect of persuading customers that this deeply discounted price, which publishers considered ruinously low, was the “natural” one for an e-book.

In January 2010, Macmillan at last claimed the right to set the price for each of its own products as it alone saw fit. Amazon resisted this arrangement, known in publishing as the “agency model.” When the two companies deadlocked, Amazon simply turned off the buttons that allowed customers to order Macmillan titles, in both their print and their e-book versions….

Other Industries
In 1978, 43 firms made and sold beer in the US, with the biggest controlling less than a quarter of the market. Today, more than 1,750 companies make beer in this country but Anheuser-Busch and MillerCoors control 90% of the market. Harper’s asserts that this gives them the ability to decide which small brewers survive, and quotes a microbrewer: “When I want to get my beer on a store shelf, I don’t call the retailer. I have to beg Anheuser-Busch.”

In the 1980s, there were more than a dozen large ad agencies and scores of smaller ones on Madison Avenue. Today four—WPP, Interpublic, Omnicom, and Publicis—control almost the entire industry. “WPP alone controls more than 300 ad agencies, including such once iconic shops as the Grey Group, Ogilvy & Mather, and Hill & Knowlton. And the four giants vigorously shore up this power with strict non-compete employment contracts.”

Musicians are being squeezed by Live Nation, doctors by hospital management corporations. Retailing is concentrating into a few mega-box chains. The list just keeps going.

Click here for the full report from Dollar Collapse.

Harry Reid Attempting To Resurrect SOPA And PIPA

February 13, 2012

WebProNews

By Drew Bowling

While details about a proposed cyber-security bill remain elusive, one frightful speculation seems to be making the rounds lately: Senate Majority Leader Harry Reid has not abandoned his effort to shackle the Internet.

After Internet commoners and companies alike pushed back in a determined way last month against the Stop Online Piracy Act and Protect IP Act, many were content to pat themselves on the back for defeating the bill. The bills, though, while delayed, were not convincingly defeated.

Harry Reid appears unwilling to let SOPA go quietly into the night. An article published last night on RT reports that Reid may be trying to resurrect SOPA by couching it within a new cyber-security bill. Worse, the new bill would also reawaken the proposed Kill Switch bill from last year. Kill Switch, another Internet-regulating bill that was lobbied by Sen. Joe Lieberman, would instill the White House with the executive power to shut down the Internet in response to a cyber threat. Awesome, right?

Last month, it was hard to imagine that any legislature could be worse for the Internet than SOPA. Now that Reid may be attempting to include Kill Switch with his renewed efforts to pass the bill, he may officially become the Dr. Frankenstein of monstrous bills that seek to muzzle the Internet.

Click here for the full report from WebProNews.

FDA Monopoly Enforcement Goes After Google For $500 Million In Online Pharmacy Ad Profits

February 10, 2012

Natural News

By Ethan A. Huff

“The FDA is at it again. This time they are going after Google. What a joke.” –KTRN

The U.S. Food and Drug Administration (FDA) recently snagged a hefty $500 million forfeiture, one of the largest in history, from search engine giant Google for running advertisements on its AdWords service for Canadian pharmacies. The agency claims these ads, which were also viewable by Americans, facilitated the illegal shipment of prescription drugs into the U.S. in violation of the Federal Food, Drug and Cosmetic Act, as well as the Controlled Substances Act.

A trophy in the FDA’s trophy case of strong-armed regulatory enforcement actions, the $500 million forfeiture demonstrates the agency’s intolerance for the sale of any drug that is not officially FDA-approved. But what it also embodies is a whole new level of government reach into private business practices, which in this case did not necessarily constitute a violation of the law on Google’s part.

Since Google did not directly introduce or deliver Canadian drugs to U.S. customers, the company is technically not in violation of U.S. law. But according to the Justice Department, Google acted as an accomplice to the crime by “enhancing the ability of Canadian pharmacies to reach American consumers,” according to The New York Times (http://dealbook.nytimes.com).

But does allowing various advertising as part of its service constitute engaging in criminal behavior? This is a blurry zone in federal law that was recently addressed in the debates about SOPA and PIPA as well, concerning whether or not allowing links to diverse content that could be in violation of the law, rather than directly censoring them, is illegal.

Click here for the full report.

New Anti-Counterfeiting Trade Agreement Worse Than SOPA Or PIPA

January 30, 2012

Activist Post

By Nile Bowie

In the wake of a public outcry against internet regulation bills such as SOPA and PIPA, representatives of the EU have signed a new and far more threatening legislation yesterday in Tokyo. Spearheaded by the governments of the United States and Japan and constructed largely in the absence of public awareness, the measures of the Anti-Counterfeiting Trade Agreement (ACTA) dramatically alter current international legal framework, while introducing the first substantial processes of global internet governance. With complete contempt towards the democratic process, the negotiations of the treaty were exclusively held between industry representatives and government officials, while excluding elected representatives and members of the press from their hearings.

Under the guise of protecting intellectual property rights, the treaty introduces measures that would allow the private sector to enforce sweeping central authority over internet content. The ACTA abolishes all legal oversight involving the removal of content and allows copyright holders to force ISPs to remove material from the internet, something that presently requires a court order. ISPs would then be faced with legal liabilities if they chose not to remove content. Theoretically, personal blogs can be removed for using company logos without permission or simply linking to copy written material; users could be criminalized, barred from accessing the internet and even imprisoned for sharing copyrighted material. Ultimately, these implications would be starkly detrimental toward the internet as a medium for free speech.

Click here for the full report from the Activist Post.

Obama Signs Global Internet Treaty Worse Than SOPA

January 26, 2012

Activist Post

By Paul Joseph Watson

Months before the debate about Internet censorship raged as SOPA and PIPA dominated the concerns of web users, President Obama signed an international treaty that would allow companies in China or any other country in the world to demand ISPs remove web content in the US with no legal oversight whatsoever.

The Anti-Counterfeiting Trade Agreement was signed by Obama on October 1 2011, yet is currently the subject of a White House petition demanding Senators be forced to ratify the treaty. The White House has circumvented the necessity to have the treaty confirmed by lawmakers by presenting it an as “executive agreement,” although legal scholars have highlighted the dubious nature of this characterization.

The hacktivist group Anonymous attacked and took offline the Federal Trade Commission’s website yesterday in protest against the treaty, which was also the subject of demonstrations across major cities in Poland, a country set to sign the agreement today.

Under the provisions of ACTA, copyright holders will be granted sweeping direct powers to demand ISPs remove material from the Internet on a whim. Whereas ISPs normally are only forced to remove content after a court order, all legal oversight will be abolished, a precedent that will apply globally, rendering the treaty worse in its potential scope for abuse than SOPA or PIPA.

A country known for its enforcement of harsh Internet censorship policies like China could demand under the treaty that an ISP in the United States remove content or terminate a website on its server altogether. As we have seen from the enforcement of similar copyright policies in the US, websites are sometimes targeted for no justifiable reason.

The groups pushing the treaty also want to empower copyright holders with the ability to demand that users who violate intellectual property rights (with no legal process) have their Internet connections terminated, a punishment that could only ever be properly enforced by the creation of an individual Internet ID card for every web user, a system that is already in the works.

“The same industry rightsholder groups that support the creation of ACTA have also called for mandatory network-level filtering by Internet Service Providers and for Internet Service Providers to terminate citizens’ Internet connection on repeat allegation of copyright infringement (the “Three Strikes” /Graduated Response) so there is reason to believe that ACTA will seek to increase intermediary liability and require these things of Internet Service Providers,” reports the Electronic Frontier Foundation.

Click here for the full report.

SOPA And PIPA To Come Back From The Dead Even Stronger

January 25, 2012

Activist Post

By Heather Callaghan

Many of us breathed a sigh of relief when an overwhelming amount of Americans banned together and voiced their opposition to Congress over both the Stop Online Piracy Act, and Protect Intellectual Property Act.

Sites that dimmed the screen for a day or two have gone back to normal — Facebook users have swapped their anti-SOPA images for their previous profile pictures.

We may have even believed that the postponement of the vote originally scheduled for January 24th was some sort of white flag of capitulation. But that is certainly not the MO of most lawmakers.

While the outcry did get the attention of Congress, they are simply returning unflinchingly back to the drawing board to wait out our attention spans. Articles whirled that SOPA was dead and the bill was pulled when the bill’s sponsor Lamar Smith said in a statement that there would be no further action “until there is wider agreement on a solution.”

Lamar isn’t really listening. “It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell American inventions and products.”

Actually, SOPA is set to be reformulated in February. PIPA will be revisited with possible amendments in the coming weeks. Case in point, all is still open and possible — nothing is dead, pulled, or cancelled. If that wasn’t enough to keep us on our toes, a new, similar bill has surfaced.

Click here for the full report from the Activist Post.

SOPA and PIPA Fully Alive – And a New Bill Joins Them

January 24, 2012

Info Wars

By Heather Callaghan

“Even though the American people are completely against the government controlling the internet, congress still wants to pass legislation for dominance over the web.” –KTRN

Many of us breathed a sigh of relief when an overwhelming amount of Americans banned together and voiced their opposition to Congress over both the Stop Online Piracy Act, and Protect Intellectual Property Act.

Sites that dimmed the screen for a day or two have gone back to normal – Facebook users have swapped their anti-SOPA images for their previous profile pictures.

We may have even believed that the postponement of the vote originally scheduled for January 24th was some sort of white flag of capitulation. But that is certainly not the MO of most lawmakers.

While the outcry did get the attention of Congress, they are simply returning unflinchingly back to the drawing board to wait out our attention spans. Articles whirled that SOPA was dead and the bill was pulled when the bill’s sponsor Lamar Smith said in a statement that there would be no further action “until there is wider agreement on a solution.”

Lamar isn’t really listening. “It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell American inventions and products.”

Actually, SOPA is set to be reformulated in February. PIPA will be revisited with possible amendments in the coming weeks. Case in point, all is still open and possible — nothing is dead, pulled, or cancelled. If that wasn’t enough to keep us on our toes, a new, similar bill has surfaced.

Déjà Vu in the form of OPEN — The New Anti-Piracy Bill

As an alternative to SOPA-PIPA, Representative Darrell Issa (CA-R), and 24 co-sponsors introduced the Online Protection and Enforcement of Digital Trade (OPEN) H.R. 3782 on Wednesday, during the Internet blackout.

Click here for the full report.

Amidst SOPA Blackout, Senate Copyright Bill Loses A Key Supporter

January 19, 2012

Forbes

By Andy Greenberg

“Keep the Internet free! Hey congress, what are you so afraid of? People discovering the truth?” –KTRN

Wednesday’s mass protest strike of popular websites including Wikipedia, Reddit, Boing Boing and others against the Stop Online Piracy Act has had its intended effect–at least on one Senator.

Florida Senator Marco Rubio, who co-sponsored the Protect-IP Act (PIPA) that served as the Senate equivalent of the SOPA bill, has officially withdrawn his support of PIPA and called for more discussion before new copyright legislation is introduced.

“Earlier this year, this bill passed the Senate Judiciary Committee unanimously and without controversy. Since then, we’ve heard legitimate concerns about the impact the bill could have on access to the Internet and about a potentially unreasonable expansion of the federal government’s power to impact the Internet,” Rubio wrote on his Facebook page Wednesday morning. “Congress should listen and avoid rushing through a bill that could have many unintended consequences.”

“Therefore, I have decided to withdraw my support for the Protect IP Act,” the statement continued. “Furthermore, I encourage Senator Reid to abandon his plan to rush the bill to the floor. Instead, we should take more time to address the concerns raised by all sides, and come up with new legislation that addresses Internet piracy while protecting free and open access to the Internet.”

Click here for the full report.

Internet Blackout Highlights Failure of American Politics

January 19, 2012

Activist Post

By J.G. Vibes

“Hey government – hands off the Internet. I think we made that loud and clear.” –KTRN

Our whole lives we have been told that we have “freedom”, that we live in a “democracy”, that “we the people” have the ability to choose the kind of society in which we want to live.

However, if you ask most Americans what kind of place they want, I guarantee you that a vast majority would disagree with almost every government action that has been put forward in their lifetime.

If we truly lived in a free society, we would not be in a half-dozen wars across the planet; we would not be subject to authoritarian policies such as the PATRIOT act and the NDAA; and the government would not have grown to become the biggest and most menacing dictatorship in the history of the world. It seems that in the past year these major events have really resonated with a great number of people, not just in this country, but throughout the world.

In the past, the oppressed would beg and plead with the very people who were responsible for their condition because they knew no other way of affecting change in society. People would ask the government to change their ways because they were under the impression that those in authority actually cared about them. After generations of failing to create change through politics, people are now shifting the direction of their message towards one another, instead of pleading with politicians and organizations that don’t care about anyone but themselves.

With the recent protests surrounding SOPA and PIPA, we have really seen this new method of protest becoming more pronounced. Sure, there are still millions drafting petitions and thousands joining marches and making signs. However, nowadays these people don’t seem to be petitioning their government; it seems that more and more they are petitioning their fellow citizens. This is because the government is an obstacle; one which stands between the people and their freedom. Therefore, it is completely impossible to solely use the government as a tool to achieve freedom; this would be like trying to use a hammer to fix a broken computer, in both cases you’re only going to make the problem worse.

Click here for the full report.