Apr 16, 2019

Axios Future

By Bryan Walsh
Bryan Walsh

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Any stories we should be chasing? Hit reply to this email or message me at steve@axios.com. Kaveh Waddell is at kaveh@axios.com and Erica Pandey at erica@axios.com.

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1 big thing: The antitrust zeitgeist

Illustration: Sarah Grillo/Axios

In a remarkable display of firepower, big companies are subjecting each other to charges of monopolistic behavior with a zest rivaling that of regulators.

What's happening: In both the U.S. and Europe, politicians and regulators are ratcheting up to curtail the market power of Big Tech and other industries. But even before they are fully engaged, market actors from college athletes to smartphone parts suppliers and newspaper publishers are taking matters into their own hands.

The backstory: In the U.S., antitrust litigation — along with other action meant to thwart perceived monopolistic behavior — has been around since the Sherman Act of 1890 first established major guardrails against market concentration.

But the current spate of threats and lawsuits are part of an anti-monopoly zeitgeist not seen on this scale since perhaps the 1930s.

What has attracted much less recognition is the scale on which businesses and organizations themselves are getting ahead of the government. Apple is on both sides in some of them. Here are two:

  • Apple-Qualcomm: In the highest-profile case, jury selection began today in San Diego in a suit in which Apple calls Qualcomm an unfair monopoly for the 5% royalty it charges on the sale price of Apple's iPhone. In a countersuit, Qualcomm says Apple owes it $7.5 billion in rightful royalties. (Qualcomm faces a separate antitrust suit by the FTC.)
  • Apple News Plus: The NYT and the Washington Post have rejected joining Apple's new news service, which offers a host of publications for a fixed price of $9.99 a month. This can be seen as a private antitrust action: An underlying factor is the 50% cut of the revenue demanded by Apple, which can charge that much because of its market power.
  • Qualcomm declined to comment. Apple did not respond to a request for comment.

An unusual, long-running case: Since 2014, a group of college football and basketball players have been suing the NCAA, which they accuse of colluding to unfairly limit how much money they can receive. The players argued that this practice restrains the market, and results in subpar teams, since colleges can't fully compete for athletes, nor athletes for the colleges.

  • Last month, a federal judge ruled for the athletes. She said the NCAA and 11 athletic conferences could offer more money for an educational purpose. "I believe the NCAA is a classic price fixing cartel and has long engaged in unlawful behavior under the antitrust laws," Jeffrey Kessler, a lead lawyer for the athletes, told Axios.
  • Antitrust experts broadly support the court's ruling. "They're going against the bedrock of antitrust law," said Marc Edelman, a professor at Baruch College. The NCAA did not respond to an email, but it has said it's appealing.

What's next: Jon Solomon, editorial director of the Sports & Society Program at the Aspen Institute, says pressure is building in Congress to allow college athletes to make money off their own names, images and likenesses. He said that athletes themselves could also one day boycott their sport.

2. Taxing the bots

Photo: Julian Stratenschulte/dpa/Getty

Most Americans will file their income taxes by midnight tonight, and employers will report their payroll taxes later this month. But companies that have replaced or expanded their flesh-and-blood staff with robots will get a free pass.

Kaveh writes: Amid fears of automation-fueled job loss, a once-fringe debate is exploding into public view: Why don't we tax the bots?

The big picture: For over a century and a half, the United States has taxed income, first to fund war and later to build up the country's coffers. But now, some experts say it's time to reevaluate who — or what — should be taxed.

  • The idea is to use money raised from companies carrying out automation to help retrain or support people who lose their jobs because of it.
  • Among the robot levy's most ardent — and improbable — supporters is Bill Gates, who in a 2017 interview said robots should be taxed "at a similar level" to the humans it replaced, even if that slows the speed of automation.
  • Pumping the brakes will give policymakers more time to counteract potential unemployment, proponents argue.

"It's a bit like polluting the environment," says James Manyika, director of the McKinsey Global Institute. Companies will choose cheap, dirty fossil fuels over clean energy unless there are incentives not to — just like they'll likely choose to automate away jobs.

Detractors, however, say a tax could stall innovation at a time when China is unwaveringly pushing to dominate AI and robotics.

  • In a report last week, the Information Technology and Innovation Foundation, a think tank, argued that the robot tax would slow GDP and wage growth.
  • ITIF president Rob Atkinson instead called for a tax credit for investing in robots, calling predictions of job loss from automation overblown.

What's next: Watch this debate head to Washington.

Go deeper: A Yale professor argues for the robot tax (The Guardian)

3. Clocking retail closings

Payless will close 2,100 stores this year. Photo: Paul Hennessy/NurPhoto/Getty

In terms of brick-and-mortar retail, 2019 store closings have already outdone last year: almost 6,000 stores are in the throes of being shut down, compared with 5,854 in 2018, reports the NYT's Sapna Maheshwari.

But there is also a rhythm to how stores close, Maheshwari writes:

  • Clothing retailers can have their closing sale and be shuttered in 5 weeks.
  • Furniture stores can take 12.
  • Jewelry retailers — a prolonged 20.
4. Worthy of your time

Illustration: Sarah Grillo/Axios

What's next for the global space race (Trefor Moss, Tonia Cowen - WSJ)

From China to the U.S., sensor surveillance gets real (Ina Fried - Axios)

A defense of ranch dressing (Maura Judkis - WP)

67,000 years ago, another human ancestor (Economist)

Alison Martin's quest: Will science fiction materialize? (Oliver Ralph - FT)

5. 1 groupie thing: Soccer tattoo

River Plate fans and the team, Buenos Aires, Dec 23, 2018. Photo: Alejandro Pagni/AFP/Getty

A fan for the Buenos Aires soccer team River Plate went viral when someone shot and tweeted a video of his right leg — with a tattooed QR code of his team beating hated rival Boca Juniors in the Copa Libertadores tournament final in Madrid.

  • When you scanned the tattoo, you viewed River Plate's goals.
  • The game ignited exceptional passion, including an attack by River Plate fans on the Boca Juniors, which is why the final was held in Madrid and not Buenos Aires.
  • According to reports, someone — perhaps Copa fans — complained of copyright infringement, and the video was removed, making the tattoo a mere, well, tattoo.

YouTube did not respond to an email seeking comment.

Bryan Walsh