Washington Insider-- Wednesday

Little Guys Threaten Big Problem for Big Tech

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

International Trade Administration Sets Final Fertilizer Duties

The International Trade Administration has published in the Federal Register final duty levels relative to its countervailing duty investigation into the import of phosphate fertilizers from Russia and Morocco.

For Russia, the countervailing duty rates were set at 47.05% for product from Industrial Group Phosphorite LLC, 9.19% for Joint Stock Company Apatit and 17.20% for all others.

For Morocco, the rate is 19.97% for OCP SA and for all others.

There is still a determination to be made by the U.S. International Trade Commission (USITC). ITA said that if the ITC “issues a final affirmative injury determination, we will issue a CVD order and require a cash deposit of estimated countervailing duties for entries of subject merchandise.”

USDA Outlook Forum This Week

USDA's Annual Outlook Forum will be held February 18-19, with the 97th version of the annual even virtual for the first time in its history.

The theme is Building on Innovation: A Pathway to Resilience.

It will be interesting to see if USDA-designate Tom Vilsack makes an appearance at the event since his confirmation vote in the U.S. Senate is now set for February 23.

The first day of the forum will still focus on the overall U.S. agricultural economic and acreage prospects for the 2021/22 season, with the updated forecast for U.S. agricultural exports for Fiscal Year (FY) 2021 due out Thursday morning.

The Friday focus will be on the detailed balance sheets for U.S. crops and livestock from USDA analysts, offering and update to the Agricultural Projections to 2030 data released late last fall.

Plus, some veteran agriculture folks will open the Friday portion of the program, including Chuck Conner (National Council of Farmer Cooperatives), Zippy Duvall (American Farm Bureau Federation), Krysta Harden (U.S. Dairy Export Council) and Rob Larew (National Farmers Union) who will address “Hot Topics in Food and Agriculture.”

Washington Insider: Little Guys Threaten Big Problem for Big Tech

The New York Times reported this week about “a new threat to big tech.” It described legal threats large firms like Google are facing in antitrust cases from Europe's top competition enforcer, the Justice Department and attorneys general from more than 30 states and territories. However, it also described threats from numerous lawsuits from smaller firms.

The report highlighted on a suit by the operator of a website called Sweepstakes Today and its claim that Google used its power over online advertising to “bleed his website dry.” In December, the firm sued Google, claiming “substantial” damages.

The Times sees this case as potentially “one of a host of private antitrust lawsuits stemming from government cases against Google and Facebook.”

Already, more than 10 suits echoing the federal and state cases have been filed against one or both of the Silicon Valley giants the Times says and notes that “many of them lean on evidence unearthed by the government investigations.” Last month, for example, a media company in West Virginia sued Google and Facebook, arguing that the tech companies had worked together to monopolize the digital ad market. Its lawyers extensively cited evidence from the government cases.

Legal experts say many more such suits are likely this year, and could be a source of mounting legal pressure on the tech companies. Federal and state officials have filed several lawsuits against Google, saying it illegally maintained monopolies in search and the online advertising market. Also, suits filed against Facebook by the Federal Trade Commission and a group of states could seek to break the company up, the Times says.

If successful, private lawsuits could be increasingly costly for Facebook and Google. The companies work with millions of advertisers and publishers every year and Google hosts apps from scores of developers, meaning there are many potential litigants, so the damages could be significant.

“There's a fair amount of scrambling going on now and folks are trying to figure out what private suits might be successful and how to bring them,” said Joshua Davis, a professor at the University of San Francisco's law school.

Julie Tarallo McAlister, a spokeswoman for Google, said that the company would defend itself against the claims.

The private suits follow the government ones for a simple reason: Regulators have distinct advantages when it comes to obtaining evidence. Federal and state investigators can collect internal documents and interview executives before filing a suit. As a result, their complaints are filled with insider knowledge about the companies. Private individuals can seek that kind of evidence only after they file lawsuits.

If the government cases succeed against Google or Facebook at trial, the win is likely to bolster the case for private lawsuits, experts told the Times. Lawyers could point to those victories as evidence the company broke the law and move quickly to their primary aim: obtaining monetary damages.

The people bringing the cases against the tech giants include publishers, advertisers and users.

The firm “Sweepstakes Today” aggregates prize contests from around the country. Its revenue comes from advertising that is sold partly by Google, according to Craig McDaniel's lawsuit, which is seeking class-action status.

For years, the website generated about $150,000 in annual revenue and turned a profit, according to the complaint. But its revenue has dropped since 2012, a fall that the suit blames on Google's dominance in online advertising.

The firm, with its public persona of “Mr. Sweepy,” said that its revenue had “dropped like a rock” and that it could go out of business. It argued that Google had also harmed its earnings by classifying the Mr. Sweepy site as a venue for online gambling, causing him to receive lower-quality ads.

Other publishers that recently have filed antitrust complaints against Google include the lyrics website Genius — which sued Google in 2019 citing its use of Genius' lyrics data in search results, only to have its case dismissed — and the progressive magazine The Nation. Both are among the plaintiffs in a lawsuit filed by the law firm Boies Schiller Flexner that is seeking class-action status. Another prominent law firm, Berger Montague, has also filed a complaint against Google on behalf of publishers.

The sweeping government claims against Facebook have helped persuade potential plaintiffs that they might have a winning case, even against huge companies like Google and Facebook.

“I think it adds credibility to the allegations,” said Tina Wolfson, a California lawyer who filed a private lawsuit against Facebook.

But lawyers bringing the lawsuits also face difficulties, including the large numbers of lawyers employed by Big Tech. These experts may try to force the cases to go to arbitration, where each individual claim would be weighed on its own rather than in one big group. And the law includes limitations on which private citizens can sue over antitrust violations.

And, it may also be difficult to calculate payouts, especially when tech giants offer their products free to users making it difficult to calculate hypothetical losses. Still, the potential payouts are big, given the size of the tech companies.

So, we will see. The big tech companies are extremely powerful competitors in nearly all economic sectors, and they likely also will be increasingly prominent targets for litigation — fights that could affect ag producers in numerous ways, and which should be watched closely as they emerge, Washington Insider believes.

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