I had the pleasure last month of hosting the first of a new annual roundtable discussion series on closing the rural digital divide through the University of Nebraska’s Space, Cyber, and Telecom Law Program. The purpose of the roundtable was to convene a diverse group of stakeholders — from farmers to federal regulators; from small municipal ISPs to billion dollar app developers — for a discussion of the on-the-ground reality of closing the rural digital divide.

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There are some who view a host of claimed negative social ills allegedly related to the large size of firms like Amazon as an occasion to call for the company’s break up. And, unfortunately, these critics find an unlikely ally in President Trump, whose tweet storms claim that tech platforms are too big and extract unfair rents at the expense of small businesses. But these critics are wrong: Amazon is not a dangerous monopoly, and it certainly should not be broken up.  

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The paranoid style is endemic across the political spectrum, for sure, but lately in the policy realm haunted by the shambling zombie known as “net neutrality,” the pro-Title II set are taking the rhetoric up a notch. This time the problem is, apparently, that the FCC is not repealing Title II classification fast enough, which surely must mean … nefarious things? Actually, the truth is probably much simpler: the Commission has many priorities and is just trying to move along its docket items by the numbers in order to avoid the relentless criticism that it’s just trying to favor ISPs.

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Summary

The relationship between classical liberalism and technology is surprisingly fraught. The common understanding is that technological advance is complementary to the principles of classical liberalism – especially in the case of contemporary, information-age technology. This is most clearly on display in Silicon Valley, with its oft-professed libertarian (classical liberalism’s kissing cousin) affinities. The analytical predicate for this complementarity is that classical liberalism values liberty-enhancing private ordering, and technological advance both is generally facially liberty-enhancing and facilitates private ordering.

This analysis, however, is incomplete. Classical liberalism recognizes that certain rules are necessary in a well-functioning polity. The classical liberal, for instance, recognizes the centrality of enforceable property rights, and the concomitant ability to seek recourse from a third party (the state) when those rights are compromised. Thus, contemporary technological advances may facilitate private transactions – but such transactions may not support private ordering if they also weaken either the property rights necessary to that ordering or the enforceability of those rights.

This chapter argues that technological advance can at times create (or, perhaps more accurately, highlight) a tension within principles of classical liberalism: It can simultaneously enhance liberty, while also undermining the legal rules and institutions necessary for the efficient and just private ordering of interactions in a liberal society. This is an important tension for classical liberals to understand – and one that needs to be, but too rarely is, acknowledged or struggled with. Related, the chapter also identifies and evaluates important fracture lines between prevalent branches of modern libertarianism: those that tend to embrace technological anarchism as maximally liberty-enhancing, on the one hand, and those that more cautiously protect the legal institutions (for example, property rights) upon which individual autonomy and private ordering are based, on the other.

This chapter proceeds in four parts. Part I introduces our understanding of classical liberalism’s core principles: an emphasis on individual liberty; the recognition of a limit to the exercise of liberty when it conflicts with the autonomy of others; and support for a minimal set of rules necessary to coordinate individuals’ exercise of their liberty in autonomy-respecting ways through a system of private ordering. Part II then offers an initial discussion of the relationship between technology and legal institutions and argues that technology is important to classical liberalism insofar as it affects the legal institutions upon which private ordering is based. Part III explores how libertarian philosophies have embraced contemporary technology, focusing on “extreme” and “moderate” views – views that correspond roughly to liberty maximalism and autonomy protectionism. This discussion sets the stage for Part IV, which considers the tensions that technological change – especially the rapid change that characterizes much of recent history – creates within the classical liberal philosophy. The central insight is that classical liberalism posits a set of relatively stable legal institutions as the basis for liberty-enhancing private ordering – institutions that are generally developed through public, not private ordering – but that technology, including otherwise liberty-enhancing technology, can disrupt these institutions in ways that threaten both individual autonomy and the private ordering built upon extant institutions.

Abstract

This paper, drafted as an adjudicator’s opinion in a recent case of nearly first impression, explores an approach to aligning the strengths and opportunities available through the U.S. International Trade Commission (ITC) by considering how more ordinary antitrust issues can be adjudicated through the Section 337 portion of the ITC’s docket. This might be done using existing law. The basic theme is that there are several significant reasons why even a skeptic of the ITC’s Anti-dumping, Countervailing Duty, and Safeguards docket (collectively, the “Title VII” docket) – as well as an antitrust skeptic – should be significantly less worried when cases normally expected to be brought in the Title VII portion of the ITC’s docket as petitions are instead brought in the Section 337 portion of the ITC docket as complaints alleging ordinary violations of the antitrust laws. Private antitrust litigation fits well within the ITC’s Section 337 docket for several reasons. It squarely fits with the plain meaning of the ITC’s statute. It also squarely fits the well-established antitrust case law. In addition, it offers some practical benefits. Unlike the relatively easy-to-satisfy legal requirement for assessing injury in the Title VII portion of the docket, a 337 investigation involving established antitrust law would turn on the substantive legal standards within that body of established antitrust law that are seen by a broad consensus to be focused on a middle of the road attempt to represent true public interest in avoiding actual economic harm to a market as a whole. In addition, a 337 investigation, which involves initial inter-partes adversarial litigation before an Administrative Law Judge (ALJ), implicates less reliance on administrative deference than an action in the Title VII portion of the docket, and more reliance than in the Title VII portion of the docket on a detailed factual record involving the full panoply of procedural devices ordinarily available in federal court for truth-testing of evidence including cross examination of testimony, all in a timeframe likely to be significantly shorter (around 18 months) than the many years typically required for antitrust litigation in federal court. Nevertheless, at least one recent high-profile dispute involving steel imported from China shows there is at least one significant barrier that may stand as a practical obstacle to a private litigant bringing an antitrust claim under the Section 337 portion of the ITC’s docket: the doctrine that federal courts developed called “antitrust injury,” During the initial phases of such a case recently brought against Chinese importers of steel by the domestic US steel industry, with support from both companies and unions, the ALJ dismissed the antitrust complaint for lack of antitrust injury in an initial determination that was then reviewed by the Commission. The ITC affirmed. This paper explores some reasons why the antitrust injury doctrine from federal court may not be a good fit for investigations brought under Section 337 at the ITC.

Following is the (slightly expanded and edited) text of my remarks from the panel, Antitrust and the Tech Industry: What Is at Stake?, hosted last Thursday by CCIA. Bruce Hoffman (keynote), Bill Kovacic, Nicolas Petit, and Christine Caffarra also spoke. If we’re lucky Bruce will post his remarks on the FTC website; they were very good.

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A U.S. Supreme Court case over the legitimacy of a credit card issuer’s terms of business with its merchant establishments is reverberating far and wide. Among others, it is rattling technology companies — including Google, Facebook and Amazon — that have business models involving multiple customers.

The case prompting all those fears – Ohio v. American Express – which the Supreme Court heard on February 26, attempts to reverse a September 2016 ruling by the U.S. Court of Appeals for the Second Circuit that went in favor of American Express. At the core of the issue are so-called “anti-steering” restrictions that Amex imposes on merchant establishments, disallowing them to “steer” customers to using cards such as Visa, MasterCard or Discover that charge lower merchant fees than Amex. The merchants would typically do that by offering customers discounts on their purchases, or in essence, “sharing” what they would save in merchant fees if the customers use a lower-fee card such as a Visa or MasterCard.

Knowledge@Wharton discussed the larger implications of the case with Herbert Hovenkamp, a professor with a joint appointment at the University of Pennsylvania Law School and Wharton, and Geoffrey A. Manne, a founder and executive director of the International Center for Law and Economics (ICLE) in Portland, Ore. They shared their insights on the Knowledge@Wharton show on SiriusXM channel 111. (Listen to the podcast at the top of this page.)

The full episode is embedded below.

In January a Food and Drug Administration advisory panel, the Tobacco Products Scientific Advisory Committee (TPSAC), voted 8-1 that the weight of scientific evidence shows that switching from cigarettes to an innovative, non-combustible tobacco product such as Philip Morris International’s (PMI’s) IQOS system significantly reduces a user’s exposure to harmful or potentially harmful chemicals.

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