Someone Explain How Amazon Can Get Away With This: Opening LineC. Thompson
With Amazon.com opening a new front in its war with vendors, one has to wonder how far this will go and how legal it is.
Because now, after running Hachette off the rails by blocking sales of some of its products in an attempt to bring down the prices of electronic books, and after bringing Time Warner to heel over the price of DVDs, Amazon is going after bigger game, with the same limitations for Walt Disney that it used to pressure Time Warner: It’s blocking pre-orders of some of Disney’s biggest summer movies.
In a loose way, Amazon’s actions sound somewhat similar to what Comcast was accused of just prior to, and in a way defining, the struggle for so-called net neutrality, or the idea of an unencumbered Internet: throttling download speeds for high-bandwidth purveyors like Netflix, which ultimately had to surrender.
The companies grow to such size and strength, in large part on the backs of the content providers whose products are in such demand that the delivery system benefits from a parallel increase in demand for its services.
Is there anything that Amazon’s doing that brushes up against something resembling antitrust law? We tried calling around to find an expert, but didn’t have much luck finding a lawyer on a weekend in August.
Presumably Jeff Bezos has an army of lawyers who have no problem with what he’s doing, so, probably not? Should it be?
As noted in Ian King’s story, “In digital-book sales, Amazon dominates with a 60 percent share of the market, according to Forrester Research.” The numbers on DVDs aren’t as clear.
Taking a look at the definitions of the term, certain elements of the concept seem to come at least a little close. The Sherman Act of 1890 outlaws “every contract, combination or conspiracy in restraint of trade.” Can there be a conspiracy with just one actor?
“Antitrust law puts a lot fewer constraints on the behavior of individual firms than it does on agreements between competitors,” Stanford University law professor Mark Lemley said via e-mail. “Hard-nosed business negotiation isn’t illegal.”
But is it restraint of trade, at least?
Sysco, Dean Foods, Priceline and Caesars Entertainment are earnings of note today as we begin to wind down the meat of second-quarter reports.
- Political stability is wobbling in Iraq, where Prime Minister Nouri al-Maliki has put guns and tanks in the streets of Baghdad and around the home of his political rival. - Meanwhile, U.S. weapons are flowing to Kurdish forces, who have taken back some ground from the Islamic State since the U.S. air strikes began. - Obama’s on Martha’s Vineyard for the next two weeks, unless something happens. - The latest truce between Israel and Hamas appears to be holding. - Ukraine demands surrender. - African Bank will be split, with plans to raise 10 billion rand ($938 million) for the good bank that remains while the South Africa Reserve Bank assumes control of what’s left. - Erdogan was swept back into office in Turkey. - Kinder Morgan is buying up its partnerships for $44 billion. - China’s monetary conditions loosened last quarter at the fastest pace in almost two years, the new Bloomberg China Monetary Conditions Index shows. - Venezuela begins closing its border with Colombia at night. - The Keystone pipeline could produce four times the amount of carbon pollution than the U.S. State Department figured. - Chad withdrew China National Petroleum Corp.s’ oil-exploration permits in a dispute over an unpaid $1.2 billion pollution penalty. - RBS is cutting its office space in Hong Kong Central by half. - Televised looting broke out in a St. Louis suburb in an angry response to the police shooting the day before of an unarmed black 18-year-old. - Hillary Clinton frags Obama, apparently beginning her presidential campaign. - That severed head appears to be too heavy for that little boy. - Tony Stewart doesn’t appear to have made the biggest of efforts to avoid running over and killing the other driver. - When yes means yes.
Another week, another plum for investors sticking with Treasuries.
Those who had been convinced at the start of the year that yields would rise have been flummoxed by (mostly) unforeseen events creating global instability that typically drive buyers to the safest securities, as well as wage growth constrained by, among other things, rising productivity.
Which is why guys like NineAlpha Capital’s Jason Evans are ready to slam the buy button on bonds, why Janet Yellen’s leash on monetary policy appears to keep getting longer and why Bill Gross might be looking pretty prescient right now.
Growth in hourly earnings on an annual basis during the current five- to six-year expansion period has been the weakest in any period of growth since at least the 1960s, Daniel Kruger reports today in his bond markets greet-the-week.
“You cannot have sustainable CPI inflation without wage inflation first,” David Tan, global head of rates at J.P. Morgan Asset Management, tells Kruger.
The bond bears will eventually get it right, and for those short-sellers in stocks who have stuck with their game, the markets are finally, for now, turning in their direction.
The most-shorted stocks have lost 2.8 percent this year, compared with a 4.5 percent gain in the S&P 500, which has recorded its first back-to-back weekly declines since May. Lu Wang greets the week in equities with the idea that money managers like Frank James of James Investment Research are operating under the assumption that a falling tide lowers all boats, the leakiest sinking the most. Those stocks that have seen some of the more outsized valuations lately are where he and others find the leaks, notably technology companies like Facebook, Amazon.com and Netflix.
His James Advantage Long-Short Fund has gained 5.2 percent this year, she writes.
“Last year was a tough year to make money shorting,” Paul Ebner, a BlackRock fund manager, tells her. “We’re now getting into a period where the market sentiment is starting to wane and the enthusiasm has started to come off.”
This remains a case of individual targets, for now.
It was busy last week for the news business in August, so you might have missed the latest disclosure from Glenn Greenwald, the former Guardian journalist who brought Edward Snowden’s revelations about the NSA to light.
The latest report finds that more than four in 10 names in the U.S. government’s “Terrorist Screening Database” aren’t tied to any known terrorist group. This is about 280,000 people who either belong to scads of terrorist organizations we don’t know about yet or who are all free-lancers.
The report was published by the Intercept, which is a clever name if you think about it, the journalism website/venture Greenwald created since striking out on his own from the Guardian. But that might not be the news.
Because the report relies on classified government documents, and they didn’t come from Snowden. As CNN reports, the article refers to documents from the National Counterterrorism Center dated August 2013 -- after Snowden fled the U.S.
So there’s at least one other leaker within the U.S. intelligence community.
Another story that flew under the radar last week was the logic employed by a U.S. judge in striking down an Alabama law that would have probably resulted in the closing of three of the state’s five abortion clinics.
The law, like those in several other states, such as Wisconsin and Texas, requires doctors at the clinics to have admitting privileges to a hospital. Here’s an article describing what that entails for a doctor in Texas, for those wondering how much of an impediment that is.
District Judge Myron H. Thompson, in his 172-page ruling, remarked that abortions are legal -- period. A woman has a constitutional right to one before a fetus is viable and has had one for 41 years now.
Something else to which we all have a constitutional right: owning a gun.
“Suppose...the federal or state government were to implement a new restriction on who may sell firearms and ammunition and on the procedure they must employ in selling such goods and that, further, only two vendors in the state of Alabama were capable of complying with the restriction: one in Huntsville and one in Tuscaloosa,” Thompson said, referring to the only two cities where abortion clinics would remain open after the law.
“The defenders of this law would be called upon to do a heck of a lot of explaining -- and rightly so in the face of an effect so severe,” the judge wrote.
Sometime in the next couple weeks, former NFL receiver Irving Fryar will have to decide whether to accept a plea deal and serve five years, or go to trial and risk 10, in response to charges that he and his mother obtained five home-equity loans in six days on one house, his mom’s.
His football career took off with his No. 1 overall selection out of the University of Nebraska in 1984 and ending with 12,785 receiving yards and five Pro Bowl selections in 17 seasons. He played nine with New England, three each with Miami and Philadelphia, and finished with two years in Washington.
After his playing career ended, Fryar became a high-school football coach not far from his hometown in Mount Holly, New Jersey, where he also founded the New Jerusalem House of God, a Baptist congregation, and was its pastor.
That’s the light side. The dark side includes his childhood with an abusive, alcoholic father, marijuana use beginning at 13, an arrest for gun possession, and two failed suicide attempts, according to a Newark Star-Ledger profile.
This kind of case is depressing because he was a likeable, respected player and a man who tried to use his notoriety and success to help his community. It’s also one that invokes the argument over nature versus nurture. Some of us never escape the old neighborhood.
Friday’s verdict in the O’Bannon trial is going to change U.S. collegiate sports so much, there will be even less reason to watch than before, and it was already pretty bad before.
Moreover, the questions that remain after the ruling leave the impression that college sports could entirely cease to exist in its current form before too long.
Not right away, of course. The NCAA has said it will appeal and who knows how long that whole process could take. But if it winds up anywhere close to what Ed O’Bannon was seeking, the arms race that would result for players -- not “students,” just players -- and the tectonic shift in the economics of collegiate athletics could probably result in, effectively, semi-pro sports leagues placed at these universities and intramural sports everywhere else.
For example, Joe Flacco. The quarterback is the Baltimore Ravens all-time leader in several categories (admittedly it’s a short history) and took the team to Super Bowl...hold on, doing the Roman numeral math...48 (Is that right? L minus X plus VIII -- yeah, 48) and was selected its most valuable player. Know where he went to college?
The University of Delaware! The school is in what used to be Division I-AA. They’re named the “Blue Hens"! They named the team after chickens, THEN PAINTED THEM BLUE. At least the namesake of the Temple Owls kill what they eat. You think this team’s going to field another Super Bowl MVP? Not that they were likely to anyway, but still.
If Title IX requires total equality in all areas of athletics for men and women, how will colleges respond when the women’s basketball team says it wants to get paid, too?
Once there’s a labor union for college athletes, who’s going to tell them they have to meet minimum academic requirements to participate in sports? Presumably by now they all have agents and union representation, so what authority does a college or university have over them? In fact, why go to college at all?
How long before corporate sponsorship takes over? Colleges unable or unwilling to make the financial commitment to underwriting sports could find it easier to abdicate -- even sell -- its sports departments to paying corporations more than willing to put their name on a team. How about the ‘‘Halliburton Aggies of Texas A&M"?
Congrats to Derek Jeter, who passed Honus Wagner on the list of all-time hits leaders in Major League Baseball. Honus Bloody Wagner. Here’s a photo of him. Does he look like someone who’s going to get surpassed in Major League Baseball’s history books by a guy who dated Mariah Carey?
Congratulations also to Mike Buteau, for his call on Rory McIlroy last week. McIlroy, who is officially on fire, won the PGA Championship yesterday by one stroke over Phil Mickelson for his fourth major title in four years and second in a row. He won the British Open in July.