For the past six months, Democrats have been glued together in a unified front against President Donald Trump, but haven’t articulated many plans of their own. On Monday, for the first time since Trump took the White House, Democrats presented their vision for the 2018 midterms and beyond. Democratic leaders unveiled the plan in Berryville, Virginia, in a predominantly Republican district currently represented by Republican Representative Barbara Comstock.

Titled “A Better Deal: Better Jobs, Better Wages, Better Future,” the Democratic message is a grab-bag of populist ideas nicked from both the Trump and Senator Bernie Sanders (I-VT) schools of thought, as well as long-running Democratic policies. It lays out a plan to boost jobs and lower the costs of living, including prescription drug prices. The plan also includes a proposal to increase the federal minimum wage to $15 an hour. Here is what else you need to know:

Better Jobs

On jobs in particular, the new agenda borrows heavily from the Trump campaign playbook of attacking “special interests” and “elites.” But Democratic leaders also sought to draw a line between their working-class promises and the promises Republicans and the Trump Administration have failed to deliver on. “Republicans have spent six months trying to raise Americans’ health costs to fund tax breaks for billionaires,” House Minority Leader Nancy Pelosi (R-CA) said in an op-ed published in the Washington Post on Monday. “Our agenda is focused on efforts to create jobs and raise incomes for American workers, to lower the cost of living for American families, and to build an economy that gives every American the tools to succeed in the 21st century,” Pelosi continued.

The minority leader, who some progressives view as embodying the elite image the party needs to rid itself of, promised “good-paying, full-time jobs” for 10 million more Americans over the next five years. Tax credits for employers to train employees, she said, would help achieve that lofty goal. Pelosi also said Democrats envision a “massive new national commitment to expanding apprenticeships and paid on-the-job training that advances their skills and careers.”

“Rigged Economy”

“A Better Deal” was not drafted by Sanders. But in their public statements about the plan, Democratic leaders have peppered their vernacular with Sanders-style rhetoric, calling the economy “rigged” and railing against “vulture capitalists.”

The second page in the new Democratic playbook concerns reforming America’s antitrust laws to increase competition and innovation, and stifle consolidation and mergers in a number of fields, from airlines to communications companies. Pelosi said the party would focus on “breaking the grip of the special interests and confronting the rising everyday costs that families have endured for too long.”

“Over the past thirty years, growing corporate influence and consolidation has led to reductions in competition, choice for consumers, and bargaining power for workers,” the Democratic plan states. “The extensive concentration of power in the hands of a few corporations hurts wages, undermines job growth, and threatens to squeeze out small businesses, suppliers, and new, innovative competitors.”

To fix these issues, Democrats promise to “prevent big mergers that would harm consumers, workers, and competition.” The party also proposed a tougher post-merger review process.

“Reorienting Government”

Senate Majority Leader Chuck Schumer (D-NY) echoed Pelosi in an op-ed published Monday in the New York Times, but framed the agenda in simple, rhetorical strokes. He wrote: “American families deserve a better deal so that this country works for everyone again, not just the elites and special interests.”

But Schumer also did what Democrats have largely failed to do since election night: admit that voters were unclear on where the party stood. “Democrats have too often hesitated from taking on those misguided policies directly and unflinchingly — so much so that many Americans don’t know what we stand for,” Schumer wrote.

But a recent Washington Post-ABC News poll suggests voters are still unsure of what Democrats believe in. A slim majority of those polled–52 percent–said the party only espouses an anti-Trump message, while 37 percent said the Democratic Party “currently stands for something.” With less than a year and a half until the 2018 mid-term elections, Democrats are trying to change that perception: “Our better deal is not about expanding the government, or moving our party in one direction or another along the political spectrum,” Schumer said. “It’s about reorienting government to work on behalf of people and families.”

Alec Siegel

Alec Siegel is a staff writer at Law Street Media. When he’s not working at Law Street he’s either cooking a mediocre tofu dish or enjoying a run in the woods. His passions include: gooey chocolate chips, black coffee, mountains, the Animal Kingdom in general, and John Lennon. Baklava is his achilles heel. Contact Alec at ASiegel@LawStreetMedia.com.

The post Democrats’ “A Better Deal”: Classic Liberal Priorities and a Dash of Populism appeared first on Law Street.

The European Union’s antitrust regulators recently levied a 2.4 billion Euro fine on Google for favoring its own shopping service while demoting competitors in online search results. The fine, which amounts to about $2.7 billion, is the largest antitrust penalty in E.U. history and reflects a more aggressive trend in European antitrust enforcement. While the decision will certainly have important consequences for Google, it also illustrates how regulators are increasingly concerned with the rise of large technology companies and how they may affect competition and innovation.

Europe’s approach is also decidedly different than the one taken in the United States, which has generally allowed businesses to experiment with new business strategies unless such practices harm consumers. But when it comes to the internet, particularly free services like Google, drawing a line at the point where behavior becomes competitive has been difficult. Read on for a look at the details of Google’s case, the arguments on both sides, and its implications for the larger debate about antitrust law.

What Did Google Do?

When searching for a product on Google, you’ve likely noticed a bar at the top of the search results with pictures and links to places where you can buy the product underneath a link to use Google’s shopping service. Margrethe Vestager, the Competition Commissioner on the European Commission, looked into Google’s practices and concluded in June that the company was promoting its shopping service in a way that violates the law. The case started back in 2015, but Vestager says that Google’s anti-competitive behavior dates back as early as 2008. Vestager says that by promoting its own services to the top of search results, while demoting other comparison shopping websites, Google used its market dominance to hurt its competitors in violation of European law.

When announcing the decision, Vestager made note of Google’s important innovations but said that the promotion of Google Shopping didn’t just seek to improve the service it provided to customers, rather it harmed the overall market. She said in a statement,

Google’s strategy for its comparison shopping service wasn’t just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors. What Google has done is illegal under E.U. antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.

At the core of the E.U.’s case is its finding that Google has a particularly large share of the market, more than 90 percent in most European countries, and that it has used that market share to reduce the visibility–and as a result, the ability to compete–of its competitors, which Vestager says are alternative comparison shopping sites that function like Google Shopping.

Regulators found that search rankings have profound importance on the attention that a website gets. The vast majority of all clicks go to results on the first page, and the comparison shopping sites that the EU considers to be Google Shopping’s competitors are ranked much further down. In her statement, Vestager notes, “The evidence shows that even the most highly ranked rival appears on average only on page four of Google’s search results. Others appear even further down.” While the full details of the European Commission’s report will be released after it reviews it with Google to avoid disclosing any trade secrets, the summarized findings provide a clear look at where the case is going.

Google’s Argument

In a blog post after Vestager’s announcement, Kent Walker, a Senior Vice President and General Counsel at Google, challenged the notion that its practices are anticompetitive. Walker argued that people tend to prefer direct links to products when searching with Google and that the E.U. undervalued the service it provides its users. Walker also argues that the comparison shopping sites that Vestager is most concerned about are not actually Google’s direct competitors, rather major shopping platforms like Amazon and Ebay are a more appropriate comparison–and those sites tend to appear at the top of the first page of results. The company also touts the innovation that was involved in creating and adapting the shopping service, arguing that it creates a better experience for its customers.

Beyond Google, there is also a group that argues that the European Commission may be doing more than just enforcing competition laws by targeting Google. Namely, they note that many of the companies that face E.U. skepticism are located in the United States, and that what Vestager is doing may amount to a form of protectionism. Even President Obama argued that European antitrust regulations have gone too far in that they protect European companies from U.S. competition.

The video below describes the charges against Google in more detail:

What’s next?

Now that the European Commission has made its ruling, Google has 90 days to respond or it could face a fine of up to 5 percent of the average daily revenue of Alphabet, its parent company. In Europe, it’s the company’s responsibility to come up with a plan to ensure it is complying with the law, not the regulator. If Google is unable to get the commission to reverse its decision, it will likely need to change how it provides product-related search results in Europe. There are two additional probes–into Google’s Android operating system and its AdSense advertising platform–that remain ongoing and Vestager indicated that the recent findings will provide a model for those pending cases.

A New Approach to Antitrust

Beyond the facts of the recent decision, efforts by E.U. competition regulators indicate a broader change to antitrust enforcement–one that is notably different from the approach taken in the United States. In fact, the U.S. Federal Trade Commission actually considered pressing a case against Google for similar behavior several years ago, but decided further action was not necessary. What was particularly striking about that decision was the fact that an unreleased report indicated that FTC staffers thought there was enough evidence to bring a case against the company, but people at the top of the agency decided against it.

The new framework put forth by European regulators–which focuses on the importance of market power and competition, and how they can impact innovation in the longer term–looks a lot like the one that has been rising in popularity among Democrats in the United States. Addressing rising concentration and corporate power is one of the most important components of the new thinking in antitrust law. Proponents of aggressive antitrust enforcement argue that a proactive approach will help ensure that large tech companies like Google and Facebook do not use their market share to harm competition and stifle innovation. While the modern U.S. approach to antitrust, which generally dates back to the 1970s, tends to place a lot of focus on how concentration affects consumers. U.S. regulators have been reluctant to intervene absent clear proof that monopolistic behavior is directly harming consumers, typically in the form of price changes. But the thinking on the left argues that the health of the market, and innovation that comes along with it, can be harmed by concentration without direct consequences for consumers. Whether antitrust regulation should focus primarily on competition rather than benefits to consumers remains open for discussion, but Europe is pushing ahead with an aggressive enforcement as the debate in the U.S. unfolds.

Conclusion

The European Commission’s decision to fine Google a record-breaking 2.4 billion Euros is a sign of the new direction that the European Union is taking when it comes to regulating competition. As large internet platform companies become the focus of intense debates about market power and concentration, there has been a growing debate over whether existing laws and regulatory frameworks are sufficient to protect the health of the market and the welfare of consumers in the long term.

While political parties in the United States are divided on antitrust enforcement, Europe seems to be forging a new approach to deal with the large internet companies that have become integral components of daily life. For Google, and companies that find themselves in similar positions, this will likely create some problems when doing business in Europe, as the E.U. regulators have indicated that the recent decision will be an important precedent for future cases.

Kevin Rizzo

Kevin Rizzo is the Crime in America Editor at Law Street Media. An Ohio Native, the George Washington University graduate is a founding member of the company. Contact Kevin at krizzo@LawStreetMedia.com.

The post The EU’s Record Fine Against Google: A New Precedent for Antitrust Enforcement? appeared first on Law Street.

United Talent agency is dealing with several big lawsuits this week. Here’s what you need to know going forward.

Packaged Deals

Boutique talent agency Lenhoff & Lenhoff has sued Integrated Creative Management and the United Talent Agency for allegedly poaching clients.

According to the complaint, Lenhoff and Lenhoff lost two unnamed clients—one a “director, producer, and DGA [Directors Guild Association] unit production manager” who tripled her income before leaving for UTA; the other a “director, producer, and production manager” who left for ICM and signed a multimillion dollar contract for a television series.

The Hollywood Reporter states that plaintiff Christopher Lenhoff’s agency “accuses UTA of a ‘robo-dialing’ program and says its efforts to avoid having clients poached included giving its competitor a list of exclusively represented clients every month.”

In particular, UTA and ICM are accused of luring Lenhoff’s clients with “packaged deals,” where talent agencies stockpile talent for projects before sending them to studios. The complaint states that “because these ‘Uber Agencies’ stockpile talent, as well as exercise control over the development, production, financing, distribution, advertising, and even the technology for delivery to the consumer, they have morphed into…producers and de-facto employers.”

In effect, Lenhoff’s agency claims that UTA’s and ICM’s packaged deals have created monopolies that harm consumers due to lack of diversity and creativity. Lenhoff seeks monetary damages and a permanent injunction to stop UTA and ICM from poaching television clients.

Unpaid Screenwriter

A lawsuit was dismissed against United Talent Agency claiming that UTA breached an implied contract for failing to pay Douglas Jordan-Benel for writing the screenplay Settler’s Day, which allegedly provided the idea for Universal’s The Purge. The Purge was written and directed by James DeMonaco. The Hollywood Reporter writes that “Benel’s manager submitted Settler’s Day to UTA agents David Kramer and Emerson Davis in July 2011. The agents passed, indicating in an email that they had a tough time ‘buying into the premise.’ DeMonaco is represented by another UTA Agent, Charlie Ferraro, and so, Benel alleged that someone at UTA must have shared the Settler’s Day script.”

Federal judge Michael Fitzgerald did not find that there was a contract between Jordan-Benel and UTA, however. Typically, in order to have a binding contract there has to be a “meeting of the minds” between the parties. In this case, Judge Fitzgerald stated that there was only evidence of Jordan-Benel’s intent. Unilateral contract offers do not make enforceable contracts.

Conclusion

The main lawsuit to keep an eye on is the antitrust lawsuit, since “poaching clients” has been a legally accepted practice in Hollywood. If Lenhoff wins, he could potentially change Hollywood and how talent agents obtain their clients.

Joseph Perry

Joseph Perry is a graduate of St. John’s University School of Law whose goal is to become a publishing and media law attorney. He has interned at William Morris Endeavor, Rodale, Inc., Columbia University Press, and is currently interning at Hachette Book Group and volunteering at the Media Law Resource Center, which has given him insight into the legal aspects of the publishing and media industries. Contact Joe at staff@LawStreetMedia.com.

The post United Talent Agency Subject to Several Lawsuits appeared first on Law Street.

The book publishing industry has had its fair share of legal disputes this year, from the consumer class-action lawsuits against the big-6 publishers to the HathiTrust case, which dealt with new fair use parameters in the digital book world.

To round out a busy year, it’s fitting that the past week was one of the busiest weeks of the year for the legal side of book publishing.

On Monday, the book publishing industry had its most important court date of the year. The Second Circuit listened to oral arguments regarding Apple’s appeal of a district court’s decision that found Apple guilty of fixing e-book prices with the big-5 publishers.

According to Publishers Weekly, Apple’s attorney, Theodore Boutros, argued that the district court erred in deciding that Apple was liable in its role in a “per se” case of price fixing in the e-book market. In antitrust law, “per se” means a violation that prevents further scrutiny of the conspiracy’s intent on the market (i.e., the effect on the market). Boutros argued that the district court should have applied a “rule by reason” framework in deciding its case, which would have taken into consideration Apple’s pro-competitive involvement in the e-book market.

The appeal also involved the big-5 publishers–Penguin and Random House merged earlier this year. Simon and Schuster’s and Macmillan’s attorneys argued that the district court’s final order should be reversed because the order extended Simon and Schuster’s and Macmillan’s original two-year “cooling off” period to four years, and the extension would hinder the publishers’ negotiations with other retailers.

The Second Circuit’s decision should be announced anywhere from a few weeks to a few months from now.

In other big year-end news, on Tuesday, Jesse Ventura continues his fight in his defamation lawsuit. Last summer, Ventura sued the estate of the late Chris Kyle for writing defamatory words about Ventura in Kyle’s book, “American Sniper: The Autobiography of the Most Lethal Sniper in U.S. Military History.” Ventura claimed that Kyle wrote that Ventura, who is a former Navy SEAL, said that the Navy SEALs “deserved to lose a few.” Kyle also alleged that he had a fistfight with Ventura. Ventura denied both allegations, and Ventura later won $1.8 million in damages, consisting of $1.3 million for unjust enrichment and $500,000 in damages.

In the latest turn of events, Ventura has set his sights on Kyle’s publisher, HarperCollins. According to the Washington Post, Ventura has claimed that Kyle’s tale of the bar fight incident increased sales of his book, which generated millions of dollars for HarperCollins. The Los Angeles Times reports that Ventura seeks $150,000 in damages, though he will likely ask for more in settlement negotiations with HarperCollins.

Ventura received criticism for continuing with his lawsuit after Kyle passed away, but Ventura claims according to CBS News, “All I wanted to do was clear my name…It has nothing to do with a widow or anything like that.” Ventura added “I would have been a big-time loser had I not pursued the lawsuit, because…the whole story was fabricated…I was accused of treason, which in the military is the death penalty.”

With all the current activity currently before the courts, 2015 seems to be an eventful year for book publishing.

Joseph Perry

Joseph Perry is a graduate of St. John’s University School of Law whose goal is to become a publishing and media law attorney. He has interned at William Morris Endeavor, Rodale, Inc., Columbia University Press, and is currently interning at Hachette Book Group and volunteering at the Media Law Resource Center, which has given him insight into the legal aspects of the publishing and media industries. Contact Joe at staff@LawStreetMedia.com.

The post The Year in Review: The Legal Side of Book Publishing appeared first on Law Street.

Steve Jobs will be testifying in a class-action trial in which it is being alleged that Apple broke anti-trust laws.

Now, Steve Jobs is, of course, dead. But before he died, he recorded a deposition and now that deposition will be played during the trial. In addition to the deposition, emails that he sent during that time period will also be used.

The suit essentially says that during part of the early iPod era–2006 to 2009–Apple only allowed music downloaded from iTunes to play on the devices. The reverse was also true–if you downloaded music from iTunes, which was admittedly one of the easiest platforms at the time, you couldn’t get it to play on another kind of device. By not allowing music downloaded from competing companies, Apple essentially broke anti-trust practices. That’s obviously no longer the case–Apple changed its products to allow music from other platforms in 2009. Now, it’s pretty easy to get content from other music retailers onto iPods, iPhones, iPads, or any other Apple devices, but “the plaintiffs argue that it inflated the prices of millions of iPods sold between 2006 and 2009 to the tune of $350 million.”

Jobs’ “testimony” seems like it could be pretty damning for Apple. For example, an email released a few years back includes a statement from Jobs as follows:

We need to make sure that when Music Match launches their download music store they cannot use iPod. Is this going to be an issue?

In addition, the plaintiff’s attorneys claim that their most salient proof comes from the reaction that Jobs had to a rival company, RealNetworks, releasing software called “Harmony.” Harmony would have allowed songs purchased from Real to be played on Apple devices. Apple responded by quickly releasing updates that rendered Harmony incompatible. Bonnie Sweeney, an attorney for the plaintiffs, said that there is evidence that Jobs was furious at Harmony’s release, and his testimony will show that.

Jobs isn’t the only familiar face from Apple who will be testifying at this trial. Marketing Chief Phil Schiller and the exec who runs Apple’s software sales, Eddy Cue, will also be there.

The fact that Jobs’ testimony is being incorporated a few years after his death says a lot more about our court system than the case itself. The case was first filed in 2005, and there’s been basically a decade of legal back-and-forth over the issue. Now, almost 10 years later, it’s hard to even remember the days when you could only use iTunes if you had an iPod. In addition, the money that’s up for grabs–the suit is for $350 million–really isn’t that much to a company like Apple. After all, Apple makes about $180 billion in a single year. But it’s gotten pretty used to defending itself in court, and this is just further example of that attitude.

What’s really making the news here isn’t the class-action lawsuit–which to be honest is pretty run of the mill and boring. It’s the fact that Jobs, who has an almost cult-like following, is going to be sort of the “star witness” from the grave. It’s not something that our legal system really imagined, but it could very well help prosecutors prove their case against Apple.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

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The National Collegiate Athletic Association (NCAA) has ruled college athletics in a manner that would make dictators green with envy, and each decade under its rule seemed to indicate the increased power they’ve gained. In 1976 the association was entrusted with the authority to penalize schools directly. In 1988, the Supreme Court held that despite its quasi-governmental makeup, the NCAA was not a state actor and therefore need not provide procedural due process. Throughout the nineties and into the present day, the NCAA brokered broadcasting deals for more and more money, resulting in a body that generated more than $750 million as of 2013.  But as any powerful politician knows, you can’t stay on top forever.

On August 8, 2014, Judge Claudia Wilken of the Northern District of California held in O’Bannon vs. NCAA that the NCAA’s current structure violates federal antitrust law. Specifically, Judge Wilken found that the NCAA can’t forbid schools from providing marginal compensation to their student athletes. For now, the ruling only approves of a $5,000 yearly allowance to an eligible NCAA basketball or football player’s trust fund. But the old guard should be nervous, as this decision is just one of several recent (and well-designed) attempts to wrestle power away from the NCAA. Earlier this year, Northwestern University football players successfully petitioned the NLRB to form a players union. Around the same time, famed labor lawyer Jeffrey Kessler filed suit against the NCAA, which essentially seeks to remove all caps on a college athlete’s earning capacity. Some journalists have indicated this is the beginning of the endfor the NCAA, but if that’s so, what lies ahead?

The good news is that courts are unlikely to reverse the advances made by the students. The NCAA has already indicated its plan to appeal O’Bannon, but since the Ninth Circuit is generally labor friendly, it’s unlikely the decision will be overturned at the next stage.

A reversal at the Supreme Court isn’t likely either. Despite a recent trend of being generally unfriendly to labor (e.g., this and this), SCOTUS is unlikely to decide O’Bannon purely on employment/labor law grounds. O’Bannon is an antitrust case, and plaintiffs in antitrust cases generally argue to oust a singular bully and restore free market principles. This is a notion most friends-of-management favor, perhaps especially in the Supreme Court’s case considering they’ve restored free market principles against the NCAA in the past.

The bad news for the student-athlete revolution is that their respective schools may have conflicting interests, and they may continue to thwart any effort to provide meaningful pay to students. Not too long ago the NCAA attempted to pass a resolution whereby student-athletes would get a stipend in addition to their scholarships. The schools, not the NCAA, pushed back against the idea.  Essentially, the schools that generated less sports-related revenue believed they would be unfairly burdened if they were forced to offer stipends in equal proportion to money makers like Texas and Wisconsin, especially after considering Title IX funding requirements.

Okay, so tax-paying Americans live with a progressive income tax rather than a flat tax, why can’t NCAA schools construct something similar with regard to student-athlete trust funds? Because the aforementioned money makers in college sports are already positioning themselves to avoid it. The day before the O’Bannon decision came down, the NCAA voted to allow the richest schools in D-I sports to have more autonomy. The autonomy could enable big schools to provide their students with more financial aid and could allow students to receive money through other pursuits (something former Colorado receiver Jeremy Bloom would have enjoyed).

The possible downside to the autonomy is that it becomes less likely the richest schools would be forced to comply with a graduated trust fund plan akin to a progressive tax. The richest schools would pay their recruits what they wanted, while the less-flush schools would be forced to pay the same amount, or risk losing even more recruits to bigger schools. This dichotomy could widen the income gap between large and small schools.

So why would the NCAA do this? Because the NCAA was a puppet government all along, man. Unlike sports oligarch FIFA, the NCAA doesn’t have a lot of disposable income. Ninety-six percent of its annual revenue is returned to charter schools, which is disproportionately given to the moneymakers of football and basketball. This money, AKA leverage, forced the hands of the NCAA and smaller schools to vote for the power-five conference autonomy, because they were scared the big schools would split off and create their own league.

In sum, the students won the day on August 8, but the real war could pit wealthy schools against not-so-wealthy schools. And in the end, the tyranny felt under the NCAA may not compare to the misery that the students and administrators of less fortunate schools feel when they try to compete against the power brokers of college sports. But ya know, viva la revolution.

Andrew Blancato

The post Watch the Throne: Who Succeeds if the NCAA Loses Power? appeared first on Law Street.

As those of us who don’t live under a rock know, an audio recording was leaked to the media last weekend of Clippers owner Donald Sterling making racist remarks. Last Tuesday, NBA Commissioner Adam Silver addressed the comments and levied historic punishment against Sterling, which included a $2.5-million fine, a lifetime ban from the NBA, and a forced sale of the basketball team that Sterling has owned since 1981. The punishment has earned Commissioner Silver the praise of basically everyone, but the envy of none. That’s because forcing Donald Sterling to sell his basketball team will be fraught with legal difficulties.

The greatest legal obstacle to overcome before finding the Clippers a new owner may be the antitrust hurdle. Several attorneys have opined that there’s little precedent beyond financial instability that permits a commissioner to force an owner to surrender ownership rights. The NBA Constitution, made public last week, is also arguably overbroad with regard to the behavior that can earn an owner the boot. Section 13(a) states that ownership stakes may be terminated if an owner “willfully violate(s) any of the provisions of the Constitution and by-laws, resolutions, or agreements of the Association.” That could include almost anything.

Leagues have been taken to court over similar antitrust issues. In 1994, former New England Patriots owner Billy Sullivan sued the NFL for antitrust violations after the league refused to let Sullivan sell a portion of the Patriots through a public stock offering.  The NFL settled the case with Sullivan for $11.5 million.

A potential antitrust case is also possible considering the domain Silver would exercise over potential buyers. Silver, like other sports commissioners, is likely to veto any buyer who plans to relocate the team to Las Vegas, due to the omnipresence of gambling in Nevada.

Sterling, on the other hand, would likely fight if the team was to be sold for anything less than $1 billion. The Milwaukee Bucks, ranked as the least valuable NBA franchise, sold this year for $550 million, $45 million more than their Forbes valuation. Considering the Clippers are in a bigger market and will soon be signing a lucrative media deal, Sterling could demand at least a $1 billion price tag.

There’s also the antitrust complication posed if NBA Hall of Famer Magic Johnson were to buy the team. Having one of the all-time affable NBA legends purchase a franchise in a city that adores him seems like the perfect fit, but consider the issue this way: Can someone force a businessman to sell his most lucrative asset to the guy he spoke disparagingly of in a private message, especially if that guy has unparalleled clout and is most likely to leverage power in writing contracts with area media networks? Sterling’s lawyers would say no, and they could be right.

Beyond antitrust issues, forcing Sterling to sell his team could be complicated by marital issues. The team is currently owned by a family trust, which could be liquidated or divided if Sterling initiated divorce proceedings against his wife, Rochelle Stein. Generally, property acquired during marriage in California is considered community property and subject to equitable distribution. Were Sterling to seek court intervention for a divorce proceeding, a California family court would halt any sale of the Clippers — absent mutual assent of the parties — in order to equitably distribute the community property of the marriage.  A court could potentially even award the Clippers to Stein (unlikely, but stranger things have happened in LA).

There’s also the possibility that probate court could complicate a Clippers sale. That’s right, in what would be filed in the “be careful what you wish for” hall of fame, Donald Sterling could die and totally screw things up for the Clippers. Like in family court, a probate court judge would presumably halt any sale of the team subject to the terms of the family trust and/or Sterling’s will. If Sterling died before a sale date was set (not a ridiculous scenario), the NBA would have the displeasure of convincing a judge that the owner-approved complaint against Donald Sterling stripping him of his ownership rights also applies to the heirs and wife of Sterling despite them not having violated NBA policy.

There you have it. If he can’t go to the games, then Donald Sterling will see you in hell.

—

Andrew Blancato (@BigDogBlancato) holds a J.D. from New York Law School, and is a graduate of the University of Massachusetts, Amherst. When he’s not writing, he is either clerking at a trial court in Connecticut, or obsessing over Boston sports.

Andrew Blancato

The post Punishing Donald Sterling Is About to Get a Lot Harder appeared first on Law Street.

Do you guys remember the Occupy Wall Street movement?  Do you remember how annoying they were? I’m glad that’s over!

They made (some) salient points, though. Chief among their complaints was the fact that, according to various financial reports, more than one-third of the nation’s wealth was controlled by one percent of the population. “Impossible!” we all screamed, “America is built on the potential of financial success through hard work!”. The OWS movement came and went, but many of the problems remain unresolved. The one percent remains the one percent, and those of us in the 99 percent maintain hope that we’ll invent the next Instagram, Microsoft, or Kardashian-esque empire to join their ranks. We all aspire to one day work for ourselves, join the upper echelon of American wealth, and vacation with Jay-Z and Beyoncè.

The distribution of wealth and prosperity is not just uneven for individuals- the same rules apply for corporations.  A recent Policymic post has exposed a fact about which I was previously unaware: many of the most popular brands in America are actually owned, in some capacity, by ten companies. These ownerships are not outright; many of the business arrangements arise as part of majority stock ownership, distribution deals, and mergers.  The same article shows that there are six companies responsible for the majority of media output in this country, and that four financial institutions control our banks.

That sh-t cray.

It’s an interesting, and even insane, premise to consider: so few people actually control so much.  In theory, there are twenty-ish CEOs that have the American economy under marionette strings. They’re the business illuminati, if you will. This statement is even scarier when you consider how much corporate money controls politics.  Many of the people that we elect to represent our interests are eventually bought and sold by private interests that do not always directly align with the desires of their constituents.  It’s hard to stick to your political promises and not become a Washington insider when your reelection campaign coffers are empty. Money wins elections, after all. NRA, anyone?

The power struggles in this country are real.  There is no problem with capitalism, and for many the drive for financial and professional success is the fuel they need to continue to work hard. That drive is premised on the possibility of one day being the boss.  It’s tougher to become the boss when there are only twenty open positions.  So much money and power in so little hands is scary.

An Antitrust Primer

Antitrust is an area of law that seeks to guarantee competition between businesses for the benefit of the public.  Antitrust law also endeavors to regulate mergers and acquisitions of businesses so that mega-corporations are not formed to unfairly dominate their respective industries.  The premise of antitrust is basically that competition is a good and necessary component of running a business, and attempts to lessen competition in an unapproved manner are illegal.

There are various reasons why a lack of competition is problematic in modern business.

The first goes back to the old phrase of “absolute power corrupts absolutely.”  Let’s take a moment to remember the history of our dear nation, shall we?  This country was founded by people who were escaping monarchies and a government where the power was vested in one person; they understood what too much power can potentially do to a country. If we subject those who govern our country to these standards, why would our businesses be treated differently?

They’re not.

When it comes to these businesses, the same premise applies.  If one company controls everything, we all lose. How else would their business practices be regulated?  Concerns from consumer prices to employee wages wouldn’t be countered by an industry standard, because the one company is the industry.

Second, competition spurs economic growth. If Samsung didn’t exist, Apple wouldn’t be a powerhouse.  There wouldn’t be a Magic Johnson without a Larry Bird, a Britney without a Christina, and a Starbucks without a Dunkin’ Donuts. You get where I’m going with this, right? Additionally, this country is still experiencing the effects of an economic downturn, and the last thing on the agenda of any political party is the slowing down of financial recovery.

This is especially true because America has been down the mega-corporation road before, and it didn’t end well.

The Lessons of Bell Atlantic

In 1974, the U.S. Department of Justice filed an antitrust lawsuit against AT&T.  In U.S. v. AT&T, 552. F.Supp.131 (D.D.C. 1983), the government sued AT&T to stop what they believed were monopoly-like business practices. The allegations were that the corporate structure created unnecessary barriers to competition, which is in direct contravention of the Sherman Act. The main goal of the Sherman Act is to establish and protect unobstructed competition between businesses as a national standard. Specifically, the complaint stated that 6conspiracies sought to “restrain trade in the manufacture, distribution, sale, and installation of telephones, telephone apparatus, equipment, materials, and supplies…”. The D.C. Circuit found that, at the time, AT&T was the largest corporation in the world. The resolution of the case created twenty-two smaller “operating” companies, mostly allocated by region.  The forming of these operating companies divests and divides the power from one major body, thus creating competition and reinforcing the tenets of the Sherman Act.

Why It Matters

Obviously this situation is significantly different, but it is sure to raise some red flags.  It’s a slippery slope, no?  With U.S. v. AT&T, there was one company dominating an industry.  The same result would not occur in the current scenario.  Here, there are ten companies controlling hundreds of consumer goods, six companies running the entertainment industry, and four banks commanding our financial institutions.  We are a merger away from a mega company stomping away at the competition. In other words, we’re monopoly-adjacent. These companies need to be closely scrutinized.  It’s the same reason that the proposed merger between US Airways and American Airlines has been scrutinized so closely as of late.  A superpower is not beneficial for the expansion of business, and it’s not in the best interests of the country.

[Policy Mic]  [Case Text] [New York Times] [Deal Book]

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Featured image courtesy of [FamZoo Staff via Flickr]

Peter Davidson II

Peter Davidson is a recent law school graduate who rants about news & politics and raves over the ups & downs of FUNemployment in the current legal economy. Contact Peter at staff@LawStreetMedia.com.

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