I'm coming to COLORADO! Catch me in DENVER on Thu (Jan 22) at The Tattered Cover, and in COLORADO SPRINGS this weekend (Jan 23–25) where I'm the Guest of Honor at COSine. Then I'll be in OTTAWA on Jan 28 at Perfect Books and in TORONTO with Tim Wu on Jan 30.
Google is spending a lot on AI, but what's not clear is how Google will make a lot from AI. Or, you know, even break even. Given, you know, that businesses are seeing zero return from AI:
But maybe they've figured it out. In a recent edition of his BIG newsletter, Matt Stoller pulls on several of the strings that Google's top execs have dangled recently:
The first string: Google's going to spy on you a lot more, for the same reason Microsoft is spying on all of its users: because they want to supply their AI "agents" with your personal data:
https://www.youtube.com/watch?v=0ANECpNdt-4
Google's announced that it's going to feed its AI your Gmail messages, as well as the whole deep surveillance dossier the company has assembled based on your use of all the company's products: Youtube, Maps, Photos, and, of course, Search:
Apple already charges Google more than $20b/year not to enter the search market; now they're going to be charging Google billions not to stay out of the AI market, too. Meanwhile, Google will get to spy on Apple customers, just like they spy on their own users. Anyone who says that Apple is ideologically committed to your privacy because they're real capitalists is a sucker (or a cultist):
But the big revelation is how Google is going to make money with AI: they're going to sell AI-based "personalized pricing" to "partners," including "Walmart, Visa, Mastercard, Shopify, Gap, Kroger, Macy’s, Stripe, Home Depot, Lowe's, American Express, etc":
Personalized pricing, of course, is the polite euphemism for surveillance pricing, which is when a company spies on you in order to figure out how much they can get away with charging you (or how little they can get away with paying you):
It's a weird form of cod-Marxism, whose tenet is "From each according to their desperation; to each according to their vulnerability." Surveillance pricing advocates say that this is "efficient" because they can use surveillance data to offer you discounts, too – like, say you rock up to an airline ticket counter 45 minutes before takeoff and they can use surveillance data to know that you won't take their last empty seat for $200, but you would fly in it for $100, you could get that seat for cheap.
This is, of course, nonsense. Airlines don't sell off cheap seats like bakeries discounting their day-olds – they jack up the price of a last-minute journey to farcical heights.
Google also claims that it will only use its surveillance pricing facility to offer discounts, and not to extract premiums. As Stoller points out, there's a well-developed playbook for making premiums look like discounts, which is easy to see in the health industry. As Stoller says, the list price for an MRI is $8,000, but your insurer gets a $6000 "discount" and actually pays $1970, sticking you with a $30 co-pay. The $8000 is a fake number, and so is the $6000 – the only real price is the $30 you're paying.
The whole economy is filled with versions of this transparent ruse, from "department stores who routinely mark everything as 80% off" to pharmacy benefit managers:
Google, meanwhile, is touting its new "universal commerce protocol" (UCP), a way for AI "agents" to retrieve prices and product descriptions and make purchases:
Right now, a major hurdle to "agentic AI" is the complexity of navigating websites designed for humans. AI agents just aren't very reliable when it comes to figuring out which product is which, choosing the correct options, and putting it in a shopping cart, and then paying for it.
Some of that is merely because websites have inconsistent "semantics" – literally things like the "buy" button being called something other than "buy button" in the HTML code. But there's a far more profound problem with agentic shopping, which is that companies deliberately obfuscate their prices.
This is how junk fees work, and why they're so destructive. Say you're a hotel providing your rate-card to an online travel website. You know that travelers are going to search for hotels by city and amenities, and then sort the resulting list by price. If you hide your final price – by surprising the user with a bunch of junk fees at checkout, or, better yet, after they arrive and put their credit-card down at reception – you are going to be at the top of that list. Your hotel will seem like the cheapest, best option.
But of course, it's not. From Ticketmaster to car rentals, hotels to discount airlines, rental apartments to cellular plans, the real price is withheld until the very last instant, whereupon it shoots up to levels that are absolutely uncompetitive. But because these companies are able to engage in deceptive advertising, they look cheaper.
And of course, crooked offers drive out honest ones. The honest hotel that provides a true rate card, reflecting the all-in price, ends up at the bottom of the price-sorted list, rents no rooms, and goes out of business (or pivots to lying about its prices, too).
Online sellers do not want to expose their true prices to comparison shopping services. They benefit from lying to those services. For decades, technologists have dreamed of building a "semantic web" in which everyone exposes true and accurate machine-readable manifests of their content to facilitate indexing, search and data-mining:
This has failed. It's failed because lying is often more profitable than telling the truth, and because lying to computers is easier than lying to people, and because once a market is dominated by liars, everyone has to lie, or be pushed out of the market.
Of course, it would be really cool if everyone diligently marked up everything they put into the public sphere with accurate metadata. But there are lots of really cool things you could do if you could get everyone else to change how they do things and arrange their affairs to your convenience. Imagine how great it would be if you could just get everyone to board an airplane from back to front, or to stand right and walk left on escalators, or to put on headphones when using their phones in public.
Wanting it badly is not enough. People have lots of reasons for doing things in suboptimal ways. Often the reason is that it's suboptimal for you, but just peachy for them.
Google says that it's going to get every website in the world to expose accurate rate cards to its chatbots to facilitate agentic AI. Google is also incapable of preventing "search engine optimization" companies from tricking it into showing bullshit at the top of the results for common queries:
Google somehow thinks that the companies that spend millions of dollars trying to trick its crawler won't also spend millions of dollars trying to trick its chatbot – and they're providing the internet with a tool to inject lies straight into the chatbot's input hopper.
But UCP isn't just a way for companies to tell Google what their prices are. As Stoller points out, UCP will also sell merchants the ability to have Gemini set prices on their products, using Google's surveillance data, through "dynamic pricing" (another euphemism for "surveillance pricing").
This decade has seen the rise and rise of price "clearinghouses" – companies that offer price "consulting" to direct competitors in a market. Nominally, this is just a case of two competitors shopping with the same supplier – like Procter and Gamble and Unilever buying their high-fructose corn-syrup from the same company.
But it's actually far more sinister. "Clearinghouses" like Realpage – a company that "advises" landlords on rental rates – allow all the major competitors in a market to collude to raise prices in lockstep. A Realpage landlord that ignores the service's "advice" and gives a tenant a break on the rent will be excluded from Realpage's service. The rental markets that Realpage dominates have seen major increases in rental rates:
Google's "direct pricing" offering will allow all comers to have Google set their prices for them, based on Google's surveillance data. That includes direct competitors. As Stoller points out, both Nike and Reebok are Google advertisers. If they let Google price their sneakers, Google can raise prices across the market in lockstep.
Despite how much everyone hates this garbage, neoclassical economists and their apologists in the legal profession continue to insist that surveillance pricing is "efficient." Stoller points to a law review article called "Antitrust After the Coming Wave," written by antitrust law prof and Google lawyer Daniel Crane:
Crane argues that AI will kill antitrust law because AI favors monopolies, and argues "that we should forget about promoting competition or costs, and instead enact a new Soviet-style regime, one in which the government would merely direct a monopolist’s 'AI to maximize social welfare and allocate the surplus created among different stakeholders of the firm.'"
This is a planned economy, but it's one in which the planning is done by monopolists who are – somehow, implausibly – so biddable that governments can delegate the power to decide what we can buy and sell, what we can afford and who can afford it, and rein them in if they get it wrong.
In 1890, Senator John Sherman was stumping for the Sherman Act, America's first antitrust law. On the Senate floor, he declared:
If we will not endure a King as a political power we should not endure a King over the production, transportation, and sale of the necessaries of life. If we would not submit to an emperor we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity.
Google thinks that it has finally found a profitable use for AI. It thinks that it will be the first company to make money on AI, by harnessing that AI to a market-rigging, price-gouging monopoly that turns Google's software into Sherman's "autocrat of trade."
It's funny when you think of all those "AI safety" bros who claimed that AI's greatest danger was that it would become sentient and devour us. It turns out that the real "AI safety" risk is that AI will automate price gouging at scale, allowing Google to crown itself a "King over the necessaries of life":
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
I think most people characterize a monopoly as kind of an economic thing or, you know, just a commercial thing. But really, a monopoly is a political institution. So, when we're talking about monopolies, we're talking about what is effectively a private government over a market, over an industry.
If you're operating in a market which is monopolized, then you have a political boss who sets the prices, the terms of trade, who can buy, who can sell, and you're under their thumb. And yeah, it's your trade, right? So, it looks like the quote unquote economy, but in fact, it's really that a person or a firm has political power over you. And if you have enough monopolies in an economy, then at least in the commercial sector, which is a big part of our lives, we're not living in a democratic society. We're living in a society of a bunch of private governments — authoritarian governments over markets.
...
There's a good quote from a plumber in the Wall Street Journal who said that, you know, the government can fine me, but Google can put me out of business because Google could take his business off Google Maps. They could change his ranking in Google search. And so, he was way more afraid of Google than the government. And that's because Google has governing power over the internet.
...
So, what you have in a lot of areas — and in most, I think — is monopoly or oligopoly, which is just a small number of companies controlling a market, and [this] is now a systemic feature of the American economy. And it didn't used to be.
The latest episode of my podcast Better Offline is a conversation with Matt Stoller — America’s leading voice on monopoly and antitrust matt
John Sherman, of the Sherman Antitrust Act, said that if we will not be ruled by a monarch, we should not be ruled by an autocrat of trade. He was very explicit about the link between monarchy and authoritarianism and monopoly. And they were using the term monarchy because fascism hadn't happened yet, but monarchy did exist. In the 19th century, Americans were looking across the ocean and they were seeing a bunch of kingdoms. There was a little bit of democracy, but that's what they were really looking at. And they were like, we don't want that.
Today we would just say fascism, and we did analogize monopoly to fascism in the 1920s, 30s, and 40s. It has always been foundational in America that concentrations of power are what we escaped, and they are not what we want here. And there's always been this tension because you do need to consolidate capital and effort to do great public works and to do great works in general. But how do you control the power of that? How do you control the power of industry?
If you're going to put a billion dollars together to build a railroad across the country, that’s awesome. Now you have a transcontinental railroad. But who runs that railroad and controls the prices they charge, or the ability for them to charge different prices to different classes of people based on who they want to see succeed? Now, all of a sudden, you're talking about a political problem.
Merger cases don’t have juries, they are ‘bench trials.’ The judge is not only making all forms of rulings on procedural motions, but is the decider of the case as well. And thus, except for the vague possibility of an appeal, the judge becomes all-powerful, able to reorganize industries almost based on gut feel.
As a result, the entire social dynamic is organized around the judge, who sits physically above everyone else on a raised platform. Every joke from the judge is hilarious, every story is charming, and every command is obeyed instantly. Everyone stands when the judge enters or exits, and anyone saying anything to the judge uses ‘his honor’ or ‘her honor’ at all times. If the judge wants brown M&Ms, fifteen lawyers paid $1 million apiece will reach out their hands holding a bag their junior associates spent all night sorting.
In his fascinating new book, ‘Goliath,’ Stoller covers the history of antitrust in the U.S. He expands on those thoughts in a wide-ranging discussion, detailing the tools available to break up Big Tech and why we’re at risk of the end of democracy.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
Remember when the American right decided that it hated (some) big businesses, specifically Big Tech? A whole branch of the Trump coalition (including JD Vance, Matt Gaetz and Josh Hawley) declared themselves to be "Khanservatives," a cheering section for Biden's generationally important FTC commissioner Lina Khan:
Trump owes his power to his ability to bully and flatter a big, distrustful coalition of people who mostly hate each other into acting together, like the business lobby and the grievance-saturated conspiratorialists who hate Big Tech because they were momentarily prevented from calling for genocide or peddling election disinformation:
The best framing for the MAGA war on Big Tech comes from Trashfuture's Riley Quinn, who predicted that the whole thing could be settled by tech companies' boards agreeing to open every meeting with a solemn "stolen likes acknowledgment" that made repentance for all the shadowbanned culture warriors whose clout had been poached by soy content moderators.
And that's basically what happened. Trump's antitrust agencies practiced "boss politics antitrust" in which favored courtiers were given free passes to violate the law, while Trump's enemies were threatened with punitive antitrust investigations until they fell into line:
Trump's antitrust boss Gail Slater talked a big game about "Trump Antitrust" but was thwarted at every turn by giant corporations who figured out that if they gave a million bucks to a MAGA podcaster, they could go over Slater's head and kill her enforcement actions. When Slater's deputy, Roger Alford, went public to denounce the sleazy backroom dealings that led to the approval of the HPE/Juniper merger, he was forced out of the agency altogether and replaced with a Pam Bondi loyalist who served as a kind of politburo political officer in Slater's agency:
Bondi made no secret of her contempt for Slater, and frequently humiliated her in public. Now it seems that Bondi has gotten tired of this game and has forced Slater out altogether. As ever, Matt Stoller has the best analysis of how this happened and what it means:
Stoller's main thesis is that the "conservative populist" movement only gained relevance by complaining about "censorship of conservatives" on the Big Tech platforms. While it's true that the platforms constitute an existential risk to free expression thanks to their chokehold over speech forums, it was always categorically untrue that conservatives were singled out by tech moderators:
Conservative populists' grievance-based politics is in contrast with the progressive wing of the anti-monopoly movement, which was concerned with the idea of concentrated power itself, and sought to dismantle and neuter the power of the business lobby and the billionaires who ran it:
The problem with conservative populism, then, is that its movement was propelled by the idea that Big Tech was soy and cucked and mean to conservatives. That meant that Big Tech bosses had an easy path out of its crosshairs: climb into the tank for MAGA.
That's just what they did: Musk bought Twitter; Zuck ordered his content moderators to censor the left and push MAGA influencers; Bezos neutered his newspaper in the run up to the 2024 elections; Tim Cook hand-assembled a gold participation trophy for Trump live on camera. These CEOs paid a million dollars each for seats on Trump's inauguration dais and their companies donated millions for Trump's Epstein Memorial Ballroom.
Slater's political assassination merely formalizes something that's been obvious for a year now: you can rip off the American people with impunity so long as you flatter and bribe Trump.
The HP/Juniper merger means that one company now supplies the majority of commercial-grade wifi routers, meaning that one company now controls all the public, commercial, and institutional internet you'll ever connect to. The merger was worth $14b, and Trump's trustbusters promised to kill it. So the companies paid MAGA influencer Mike Davis (who had publicly opposed the merger) a million bucks and he got Trump to overrule his own enforcers. Getting your $14b merger approved by slipping a podcaster a million bucks is a hell of a bargain.
HP/Juniper were first, but they weren't the last. There was the Discover/Capital One merger, which rolled up the two credit cards that low-waged people rely on the most, freeing the new company up for even more predatory practices, price-gouging, junk-fees, and strong-arm collections. When the bill collectors are at your door looking for thousands you owe from junk fees, remember that it was Gail Slater's weakness that sent them there:
Slater also waved through the rollup of a string of nursing homes by one of the world's most notoriously greedy and cruel private equity firms, KKR. When your grandma dies of dehydration in a dirty diaper, thank Gail Slater:
Slater approved the merger of Unitedhealth – a company notorious for overbilling the government while underdelivering to patients – with Amedisys, who provide hospice care and home health help:
The hits keep coming. Want to know why your next vacation was so expensive? Thank Slater for greenlighting the merger of American Express Global Business Travel and CWT Holdings, which Slater challenged but then dropped, reportedly because MAGA influencer Mike Davis told her to.
Davis also got Slater to reverse her opposition to the Compass/Anywhere Real Estate merger, which will make America's dysfunctional housing market even worse:
It's not just homebuyers whose lives are worse off because of Slater's failures, it's tenants, too. Slater settled the DoJ's case against Realpage, a price-fixing platform for landlords that is one of the most culpable villains in the affordability crisis. Realpage was facing an existential battle with the DoJ; instead, they got away with a wrist-slap and (crucially) are allowed to continue to make billions helping landlords rig the rental market against tenants.
So Slater's defenestration is really just a way of formalizing Trump's approach to antitrust: threaten and prosecute companies that don't bend the knee to the president, personally…and allow companies to rob the American people with impunity if they agree to kick up a percentage to the Oval Office.
But while Slater will barely rate a footnote in the history of the Trump administration, the precipitating event for her political execution is itself very interesting. Back in September, Trump posed with Kid Rock and announced that he was going after Ticketmaster/Live Nation, a combine with a long, exhaustively documented history of ripping off and defrauding every entertainer, fan and venue in America:
At the time, it was clear that Trump had been prodded into action by two factors: the incredible success of the Mamdani campaign's focus on "affordability" (Ticketmaster's above-inflation price hikes are one of the most visible symptoms of the affordability crisis) and Kid Rock's personal grievances about Ticketmaster.
Kid Rock is the biggest-name entertainer in the Trump coalition, the guy Trump got to headline a MAGA halftime show that notably failed to dim Bad Bunny's star by a single milliwatt. Trump – a failed Broadway producer – is also notoriously susceptible to random pronouncements by celebrities (hence the Fox and Friends-to-Trump policy pipeline), so it's natural that Kid Rock's grousing got action after decades of documented abuses went nowhere.
Ticketmaster could have solved the problem by offering to exempt Trump-loyal entertainers from its predatory practices. They could have announced a touring Trumpapalooza festival headlined by Kid Rock, Christian rock acts, and AI-generated country singers, free from all junk fees. Instead, they got Gail Slater fired.
Mike Davis doesn't just represent HPE/Juniper, Amex travel, and Compass/Anywhere – he's also the fixer that Ticketmaster hired to get off the hook with the DoJ. He's boasting about getting Slater fired:
What's interesting about all this is that there were elements of the Biden coalition that also hated antitrust (think of all the Biden billionaires who called for Lina Khan to be fired while serving as "proxies" for Kamala Harris). And yet, Biden's trustbusters did more in four short years than their predecessors managed over the preceding forty.
Stoller's theory is that the progressive anti-monopoly movement (the "Brandeisians") were able to best their coalitional rivals because they did the hard work of winning support for the idea of shattering corporate power itself – not just arguing that corporate power was bad when it was used against them.
This was a slower, harder road than dividing up the world into good monopolies and bad ones, but it paid off. Today the Brandeisians who made their bones under Biden are serving the like of Mamdani:
They lit a fire that burns still. Who knows, maybe someday it'll even help Kid Rock scorch the Ticketmaster ticks that are draining his blood from a thousand tiny wounds. He probably won't have the good manners to say thank you.
I’m coming to GUELPH, ONTARIO THIS FRIDAY (May 8) to deliver the Musagetes Lecture.
One of my bedrock beliefs is that capitalists really hate capitalism. They may name their beloved institutes after the likes of Adam Smith, but they ignore everything Smith had to say about the necessity of competition to keep markets from turning into monopolies:
The theory of capitalism holds that markets are a kind of distributed computer that aggregates trillions of decisions from billions of market participants in order to optimize production and distribution of goods and services, creating a "Pareto-optimal" world where no one can be made better off without making someone else worse off.
Whether or not you believe that this computer exists and functions as predicted, one indisputable fact about it is that it requires the freedom to choose in order to work. The point of market-as-computer is that it aggregates decisions, so it can only work if everyone is as free as possible to decide.
But that's not the world capitalists want. For capitalists, the point is to restrict other people's choices in order to maximize your own freedom. That's how we get economic doctrines like "revealed preferences": the idea that if a person says they want one thing, but does another thing, then you can tell what they really prefer by looking at the latter and disregarding the former. This is the kind of doctrine you can only fully embrace after sustaining the kind of highly specific neurological injury that is induced by taking an economics degree, an injury that makes you incapable of perceiving or reasoning about power. Under the doctrine of revealed preferences, someone who sells their kidney to make the rent has a revealed preference for only having one kidney:
Capitalism is supposed to run on risk: the risk of being overtaken by a competitor drives businesses to deliver better services more efficiently, thus producing a bounty for all. But capitalists really hate risk, hence the drive to monopoly: Mark Zuckerberg admitted, in writing, that he only bought Instagram so that he wouldn't have to compete with it ("It is better to buy than to compete" -M. Zuckerberg):
Capitalists hate capitalism, but they love feudalism. Feudalism is like capitalism, in that you have a ruling class that creams off the surplus generated by labor; but under feudalism, society is organized to protect rents (money you get from owning stuff) over profits (money you get from doing stuff). The beauty of rents is that they are insulated from risk: if you own a coffee shop, you're in constant danger of being put out of business by a better coffee shop. But if you own the building and your coffee shop tenant goes under, well, you've still got the building, and hey, now it's on the same hot block as the amazing new cafe that's driving its competitors out of business:
Douglas Rushkoff calls this "going meta": don't drive a taxi, rent a medallion to a taxi driver. Don't rent a medallion, start a ride-hailing app company. Don't start a ride-hailing company, invest in the company. Don't invest in the company, but options on the company's shares. Each layer of indirection takes you further from the delivery of a useful service – and insulates you further from risk:
Monopoly is to capitalism as gerrymandering is to democracy, a way to strip out any meaningful choice. Think of the two giant packaged goods companies that fill your grocery aisles: Procter & Gamble and Unilever. Practically everything on your grocer's shelves is made by a division of one of these two massive conglomerates. If you try to "vote with your wallet" by buying a low-packaging version of a product, it's going to be sold to you by the same company that sells the high-packaging version. If you switch to an artisanal brand of cookies made by a local family business, Unilever or P&G will buy that company and issue a press release declaring that they made the acquisition because they know "their customers value choice":
Gerrymandering strips your vote of any impact on political outcomes. Monopoly strips your purchases of any ability to influence economic outcomes. Wrap both of them in "revealed preferences" and you get a system that endlessly narrates its ability to deliver choice, and then blames your misery on your having chosen badly.
This is the method of the entire conservative project. As Dan Savage says: the thing that unites conservative assaults on voting, birth control, abortion and no-fault divorce is the stripping away of choice. Conservatives are trying to create a world populated by husbands you can't divorce, pregnancies you can't prevent or terminate, and politicians you can't vote out of office. Add to that Trump's assault on the National Labor Relations Board, his reversal of the FTC's ban on noncompetes, and his protection of "TRAP" agreements that force employees to pay thousands of dollars if they quit their jobs, and you get "jobs you can't quit":
Conservative strongmen like Trump and Musk exalt the value of self-determination – for themselves, at everyone else's expense. Trump's ability to stiff the contractors that built his hotels and Musk's ability to rain flaming rocket debris down on the people who live near his company town require that everyone else be stripped of protections. They get to determine their own course in life by taking away your ability to determine your own. Their right to swing their fists ends two inches past your nose:
Cheaters and bullies hate the rule of law, hence Trump's endless repetition of Nixon's mantra: "When the president does it, that means it is not illegal." But not everyone can be president, and the world is full of would-be Trumps in positions of power who would like to be able to commit crimes without fear of legal repercussions. For these people, we have something called "binding arbitration."
"Binding arbitration" is a widely used contractual term that forces you to surrender your right to sue a company that wrongs you. Instead of suing, binding arbitration forces you to take your case to an "arbitrator"; that is, a lawyer who is paid by the company that cheated you or maimed you or killed your loved one. The arbitrator decides whether their client is guilty, and, if so, how much that client owes you. The entire process is confidential and it is non-precedential, meaning that if a company rips off millions of people in the same way, each of them has to arbitrate their claims separately, and people who are successful can't share their tactical notes with the people who are next in line to plead for justice.
That makes binding arbitration another key weapon in the conservative movement's war on choice: not just jobs you can't quit and politicians you can't vote out of office, but also companies you can't sue. Binding arbitration is a creation of the Federalist Society and their champion Antonin Scalia, who authored a series of Supreme Court dissents and (ultimately) decisions that opened the door for binding arbitration everywhere:
Given the Fedsoc's role in shoving binding arbitration down every worker and shopper's throat, it's decidedly odd that they invited Ashley Keller to be their keynote debater in 2021, where he argued that "concentrated corporate power is a greater threat than government power":
https://www.youtube.com/watch?v=aY5MrHGjVT8
Keller is a powerhouse lawyer, and an avowed conservative, who has pioneered many tactics for overcoming binding arbitration clauses. He helped create "mass arbitration," bringing thousands of arbitration cases on behalf of Uber drivers who'd had their wages stolen by the company. Since Uber has to pay the arbitrators in each of those cases, they faced a much larger bill than they would face in any possible class action suit:
Mass arbitration cases spread to all kinds of large firms that used petty grifts to steal from thousands or even millions of people, like Intuit, who deceive – and rip off – millions of Americans every year with their fake Turbotax "free file" system:
Mass arbitration worked so well that Amazon actually revised its terms of service to remove binding arbitration from their terms of service, because they realized that they'd be better off facing class action suits:
Of course, the point of binding arbitration was never to create a streamlined system of justice – it was to bring about a world of no justice, where you have no right to sue. It's part of the decades-old "tort reform" movement that the business lobby has used to take away your right to sue altogether. Any time you hear about a seemingly crazy lawsuit (like the urban legends about the McDonald's "hot coffee" case), you're being propagandized for a world without legal consequences for companies that defraud you, steal from you, injure you, or kill you:
That's why companies (like Bluesky) are now trying terms of service that also ban you from mass arbitration, while retaining the right to consolidate claims into a mass arbitration case if that's advantageous to them:
But Keller keeps finding creative ways around binding arbitration. He's currently bringing thousands of arbitration claims against Google, on behalf of advertisers whom Google stole from (Google is a thrice-convicted monopolist, and they lost a case last year over their monopolization of ad-tech, where they were found to have defrauded advertisers).
He also just argued before the Supreme Court in a case against Monsanto over the company's attempt to escape liability for causing cancer in farmworkers with their Roundup pesticide:
Keller appears in the latest episode of the Organized Money podcast, for a fascinating interview about his work and outlook, and how he reconciles his work fighting corporate power with his identity as a movement conservative:
Keller's first big, important point is that (basically), capitalists hate capitalism (see above). He cites Milton Friedman, who "always said that the tort system is the best way to ensure that companies behave and follow the rules." For Keller (and Friedman) the alternative to private litigation against bad businesses is "government regulation and the alphabet soup of Washington, DC agencies [that] try and police these companies."
But, of course, the businesses that want binding arbitration and tort reform (so they can't be sued) also want to "dismantle the administrative state" (so they can't be regulated). They're the impunity movement, the "when the president does it, that means it is not illegal" movement, the "heads I win, tails you lose" movement. They're the caveat emptor movement, the "that makes me smart" movement:
They don't want efficient markets, with the ever-present threat of a better competitor putting them out of business. They want feudalism. They want to go meta. They want to have the kind of self-determination you can only achieve by taking away everyone else's self-determination.
I was very struck by Keller's claim to be engaged in an exercise that Milton Friedman identified as the best one for making markets work. One of Keller's most forceful points is that class action suits are especially important for reining in petty, recurrent grifts, the junk fees that are the hallmark of enshittification.
He quotes his old boss, the archconservative judge Richard Posner, who said "Only a lunatic or a fanatic sues for $20." But if you multiply a $20 junk fee by ten million purchases, a company can use that fact to make hundreds of millions of dollars. That's real folding money, which is why every company has figured out a way to whack you for a $20 junk fee.
There are two ways to end this racket: one is litigation, the other is regulation, and the capitalism-hating-capitalists who run the world want to kill both. That's why the business lobby smears lawyers like Keller as being "vultures." But as Matt Stoller says, "vultures look aggressive and whatnot, but when you actually get rid of vultures out of an ecosystem, all sorts of things go haywire."
I love this point. Vultures live off the disgusting, rotting crap that would otherwise pile up around us, breeding disease and emitting an unbearable stench. If plaintiff-side, no-win/no-fee lawyers are vultures, then junk fees, wage theft, and the million petty frauds they fight are the disgusting, rotting crap that vultures feed off of – and the harder we make it for our noble vulture lawyers, the more disgusting, rotting crap we have to live with, hence the unbearable stench that is all around us.
Listening to Keller was a fascinating exercise. I thoroughly disagree with him about many things – the way he characterized Section 230 of the Communications Decency Act couldn't have been more wrong – but it's quite bracing to hear a capitalist who doesn't hate capitalism defend it against the vast majority of capitalists, who hate capitalism more than any socialist ever did.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
