SCOTUS, Soccer and SpaceX
In the Tech + Corporate Power world…
The Supreme Court dealt another blow to executive agencies this week. On Monday, the court put out a decision in Trump v. Slaughter that upends the work of independent agencies by allowing the President to fire any commissioner from (almost!) any agency. The decision (by design, I would argue) increases the barriers for agencies to make rules and conduct enforcement actions over the long term, leaving public safety and well-being in the dubious clutches of a new Spoils System subject to partisan whims.
The House Monopoly Busters Caucus, led by Rep. Pramilla Jayapal, put out a letter asking Uber and Lyft to explain themselves after Consumer Reports (which has been on an absolute tear of awesome surveillance pricing stories) reported massive price differences on similar rides. The letter makes bold asks for Uber and Lyft to provide data on how it sets prices.
The letter also asks the companies to describe how they can calculate a real “discount” when prices change all the time, an extremely important distinction to pick apart when new bills banning or restricting surveillance pricing bills exclude loyalty programs and discounts. Evidence is ramping up that these “discounts” aren’t discounts at all, but another name for predatory pricing schemes designed to ensure that people pay the highest possible price.
The letter asks for answers from the companies by July 17, and I’m looking forward to seeing what they have to say for themselves.
Many things are afoot at the World Cup this month, but one of them is SHENANIGANS. Speculative ticketing is in the spotlight as more reports are coming out about families that bought World Cup tickets and travelled to the US only to discover that their tickets did not exist. This happens when speculators sell tickets to events before they themselves have those tickets. Obviously, this is bonkers, and unfortunately there is likely no recourse for victims who get a refund for their ticket but not for airfare, hotels, and so on. Many states have already banned speculative ticketing, hopefully scandals like these will push for more states and Congress to take action.
Emily Peterson-Cassin
CFA takes on a goliath…
In April, CFA filed a lawsuit against Meta in DC Superior Court invoking the D.C. Consumer Protection Procedures Act (CPPA), in which a nonprofit or public interest organization may seek an injunction against the use of an unlawful trade practice as the named plaintiff in a representative class action. CFA seeks to recover damages, illegal profits, and injunctive relief for D.C. consumers and to prevent Meta from benefiting from its violations of D.C. law. We hope to draw more attention to Meta’s pattern of horrible behavior that has led them to being the #1 source for scams where people are losing money.
Last week, Meta responded asking to throw out the lawsuit entirely. The crux of the effort to dismiss this lawsuit is Meta’s argument that, because everyone who has a Facebook account supposedly agreed to its lengthy, fine print Terms of Service, CFA can’t sue them in DC Superior Court and can’t sue them over their decisions to mislead consumers about the safety of their platform. These terms – linked next to the tiny box you are required to check before you hit the big Sign Up button, if opened – can change anytime and include ‘agreements’ not even on that webpage.
Meta is also weaponizing Section 230, the 1996 law designed to facilitate open communication on online platforms without holding platforms responsible for everything said on the platform. They’re looking to transform it into blanket protection for the paid advertisements for which Meta provides targeting and even content creation.
As consumer scam losses keep piling up and Meta platforms continue to be where the most reported losses are coming from, the company decided to charge a higher rate for ads they evaluate as likely scams instead of blocking them. Meta is maximizing their profits from these scam ads and shirking any responsibility to stop them, and the people are paying for it.
Ben Winters
In financial markets…
The SpaceX story keeps getting worse. After an early market high, the small float of shares fell from a height of $225 and appear to have stabilized around $135. While Musk’s company raised about $75 billion from the IPO, almost every investor, especially retail, is worse of today. In another highly unusual move and further sign that this was a bad deal for investors, just weeks after raising enormous amounts in an IPO, SpaceX issued $25 billion in debt.
Index funds, who changed their rules as a favor to Musk’s company, took that opportunity to dump the now devalued stock onto millions of investors. Low-cost index funds are one of the most responsible investments a retirement investor can make - but this move raises concerns about their future.
Questionable ethics: reports emerged that Theodore Gillibrand, son of Senator Kirsten Gillibrand of New York, has raised $30 million to start his own perpetual futures company, a highly risky financial derivative most popular in crypto markets. Senator Gillibrand is one of the main sponsors of the CLARITY Act, a bill that would deregulate crypto markets and eliminate SEC oversight of these kinds of derivatives.
Beyond-questionable ethics: the Senate continues to negotiate a crypto bill which they hope to pass in July. Supporters are working on a bipartisan deal that does not prevent the President’s family from owning crypto companies. President Trump took in $1.4 billion last year from his crypto enterprise, his most profitable businesses by an order of magnitude.This continued push for crypto deregulation creates huge risks at the same time as independent agencies were stripped of their independence by the Supreme Court, as Emily noted.
Corey Frayer