New York State to Revolutionize Antitrust

The Amazon H2Q fight in 2019 woke up the anti-monopolists in New York. Now they are moving forward with a new stronger trust-busting law.


Welcome to BIG, a newsletter about the politics of monopoly. If you’d like to sign up, you can do so here. Or just read on…

Today’s issue is about a ground-breaking antitrust bill - New York Senate Bill 933 - that is likely to be voted on in the New York state Senate this week. SB933 is probably the most significant legal challenge to big tech monopoly power in the country, and would overturn the big business-friendly way we currently interpret antitrust law.

As the New York Times Dealbook noted last week, with this bill, “New York may change how America does antitrust.” In this issue, I’ll both explain the legislation and do an interview with the sponsor of the bill, New York Deputy Majority Senate Leader Michael Gianaris.

This issue is also a bit special, because there’s an action item included that will make a difference. If you’re a New Yorker, you can write your representative in the state assembly and ask him or her to support SB 933. Doing so matters, because unlike members of Congress, state legislators can be affected by just a few emails from constituents. You can find and write your Assembly member here: And if you don’t live in New York state, there’s a chance you know someone who does. Forward this issue to them!

Also in this issue are short blurbs on a few other topics, including how Australia successfully forced Google and Facebook to pay for news, and how private equity once again is responsible for another hack, this time of the New York subway’s computer systems.

And now…

What Politicians Took Away from the Amazon HQ2 Fiasco

In 2017, Amazon launched an audacious ploy, asking cities to enter a bidding contest over where it should locate its second headquarters. It offered 50,000 jobs to whoever would grant them the best package of benefits. Mayors threw themselves at Bezos, with endless offers of helipads, fee reductions, relocation grants and tax subsidies; one cringe-worthy city council even voted to rename itself ‘Amazon’ if it got the bid. After three years, Amazon finally decided to split the bid between northern Virginia and New York City, getting in return a range of tax incentives, and even an exemption from freedom of record requests.

But then something unexpected happened - a politically powerful faction of New Yorkers actually opposed the deal. This was first serious political pushback to Amazon it had ever really experienced. Amazon’s executive leadership, frustrated at the criticism, pulled the plug on New York, withdrawing its offer of an HQ2 to the city. For New Yorkers who opposed the deal, the lesson has been twofold. First, it’s not necessary to beg corporations to ‘create jobs’ with public dollars. Since 2019, Amazon has been moving jobs into the city without the tax incentives. And second, it’s time to take the problem of monopoly and corporate power more seriously.

The most important critic of Amazon’s HQ2 stunt was a leader of the New York state Senate, Michael Gianaris, who represents parts of Queens. Gianaris worked to block the deal, saying Amazon was trying to “shake down governments to get its way” rather than “seriously engage with the community they proposed to profoundly change.” When Amazon pulled out, Gianaris argued that it was time for “a national dialogue about the perils of corporate subsidies,” and more broadly, the problem of corporate power.

That dialogue is now here. And it is starting with a bill Gianaris is pushing through the state legislature to take on corporate monopolies.

NYT Dealbook: “New York May Change How America Does Antitrust”

Last year, Gianaris introduced a bill to update New York state’s antitrust law, with the goal being to move away from the monopoly friendly standard judges use right now to understand what constitutes a market power, which is known as the ‘consumer welfare’ standard. This week, the updated bill is likely to pass the full state Senate, and will be headed for the New York Assembly. It is a serious effort. Gianaris is a powerful player in New York politics, and the legislation has the support of New York’s Attorney General, Letitia James, who is also leading one of the key antitrust cases against Facebook.

You can tell it matters because the New York Times’s Dealbook - read by investors - reported on it last week.

What would this bill do? It would change standards for how a firm is considered to be too powerful. While changing standards seems technical and wonky, such a change would in fact be a revolutionary act to break the power that dominant firms have over our economy. (I testified on behalf of the bill last year, and my organization has written an explainer of the legislation.)

Right now, to be considered subject to monopolization law, a firm has to have 70-90% of a market, plus it has to engage in egregious behavior that economists measure as inefficient. This bill would blow up that entire framework. First, a firm would only have to have 40% of a market to be considered dominant. Plus, firms that are powerful enough to set wages across an industry, ahem Amazon, would also be considered dominant. It wouldn’t be illegal to be dominant, but under this legislative framework, dominant firms would no longer be allowed to engage in predatory conduct or block competitors from the market.

The legislation would also expand what would be considered anti-competitive behavior. A bunch of stuff that is now dead-letter law, like predatory pricing or selling below cost to capture market share, could come back. The bill would also let private actors sue under these new standards, so it would allow newspapers, grocery stores, pharmacists, manufacturer and employees to sue if they are being abused by a powerful buyer, seller, and/or distributor.

On Friday, I spoke with Senator Gianaris to talk about the legislation and what he learned from his fight with Amazon. This is a lightly edited transcript.

“Too Much Power in Too Few Hands” - An Interview with Senator Michael Gianaris:

Senator, first of all, thanks for talking to me. I’ll start with a simple question. Do we have a monopoly problem? And if so, can you frame the issue in terms that anybody could understand?

Sen. Gianaris: The best way I can put it is that there is too much power in too few hands. This concentration of power creates the opportunity for corruption, and not just corruption in the traditional sense, although it creates that opportunity as well. But it just corrupts the way the marketplace is supposed to work. It diminishes competition, and it squashes small and medium sized players, who can't compete with not just the size of the biggest players, but the tactics that they're using and their reach into multiple aspects of economic life.

For goodness sake, they are reaching into multiple aspects of governmental life, and they're trying to dictate to governments how we should be making our decisions. And we saw it, of course, with Amazon’s second headquarters situation. They created a bidding war amongst local governments! And you saw it again, with Amazon trying to change the makeup of Seattle City Council because they weren't happy with a proposal to help homeless people.

This power is changing the very nature of our democracy and our economic democracy, to have so few people making all the decisions.

You had a big role in the fight over Amazon's second headquarters dispute. How did that factor into your thinking about the need to strengthen antitrust laws?

Sen. Gianaris: It certainly gave me a very direct experience with the tactics and the dangers associated with this problem. Amazon is a company that couldn't be bothered to engage with local stakeholders about the fact that they wanted to drop in and completely remake this community.

And it was almost like they were offended that anyone would ask. You know, in their minds, they had a legitimate bidding war that they were choosing the winners of. They were making governments bend over backwards to throw money at them, to grace them with their presence. And when someone's like, “Hey, wait a minute, why are you putting the helipad here? What's going to happen to the infrastructure in the neighborhood?” They couldn't be bothered. They just walked away rather than even answer the questions.

So that got me much more aware of the problem. And increasingly, it also inspired me to dig a little deeper in some of the broader implications.

How does the bill actually work?

Sen. Gianaris: The bill would do a couple of things. First, the bill would update interpretations of antitrust law, because currently the standards of what constitutes an illegal monopoly have been narrowed so dramatically over the years that antitrust these days doesn't apply functionally to the modern economy. So the biggest reform is moving from the existing monopoly standard to the “abuse of dominance” standard that's used so much in the rest of the world, and has allowed for greater enforcement.

Second, New York's antitrust laws are very outdated, about a century old at this point. Right now, we can only enforce against cartels, this bill would allow us to deal with single firm monopoly conduct. We're also updating the penalties so they more closely match with the Federal standard. We will also have a private right of action, which obviously has big implications in terms of greater enforcement.

My legislation also matches federal law with a pre-merger notification requirement so the state Attorney General knows a merger is happening. This would allow the AG to more easily stop bad mergers.

How would small businesses and medium sized businesses be affected by the bill?

Sen. Gianaris: To the extent that large businesses are using a dominant market position to stifle competition and hurt small and medium sized businesses, small and medium size firms would now have enforcement action available to fight back.

The first canaries in the coal mine were the bookstores that went down when Amazon was just selling books. That model has now been exported into so many other fields. Pretty much all companies at this point either have to play by the rules set by the big tech players, or get crushed. So someone like Google controls the order of things you see in search results, and they also sell products or have relationships with people who sell products. The biases that come into that are obvious. So you're either begging Google to be higher up on that list, or you're at a huge disadvantage.

That is why we have so much support from small and medium size firms. Yelp testified in our hearing, and umbrella organizations that represent small business are in support.

What about workers? Does this address labor?

Sen. Gianaris: It sure does, which is why we have so much support from organized labor for this legislation.

The workplace also works under the principles of competition. The worker has a choice, “I can go work for Company A and Company B and Company C or Company D.” The more choices they have, the more power they have to demand a better salary or better benefits or whatever the case might be.

Functionally, when Amazon rolls into town, especially in smaller localities, it becomes a company town. To exaggerate slightly, if their only choice is go work at an Amazon warehouse, or don't have a job, if the choices are limited in that way, they're going to take whatever terms are given to them by the prospective employer.

So again, it's a matter of market power in the workplace economy. We're trying to give the folks who are doing the work more leverage in a way that would accurately reflect their value and worth.

I was listening to antitrust defense lawyer Eric Stock at Gibson Dunn, a law firm that represents big tech, discuss the bill. And Stock made arguments like, “Oh, this will, you know, affect the smallest businesses,” and he talked about how it could ruin your kid's birthday party because Chuck-E-Cheese style restaurants would fall under its authority.

Sen. Gianaris: I would expect nothing less than scare tactics from the defenders of the status quo. There is no regulator or judge who would intervene in that kind of a situation. This bill is intended for the big players who are abusing small businesses and medium sized businesses.

What's the general feedback you get when you talk to your colleagues?

Sen. Gianaris: It's a very academic issue, and it requires a fair amount of education. But the deeper my colleagues look into it, the more supportive they are.

Anytime you go after big business, and these are the biggest businesses, some people think, “Oh, no, we don't want to hurt jobs.” Then you just have to explain, “This actually helps jobs. The more competitors you have, the more jobs there will be. And the more power that workers have, the better off their lives will be.”

So once you scratch the surface, people very quickly come along. I’m optimistic on the Senate side, we're gonna see movement next week. What’s interesting is that as we get closer to passage, the opposition is coming harder, but it lacks substance. The opponents are starting to throw slurs, like “This is European style economics.” I don't even know what that means, you know, but I guess they're trying to imply that it is anti-capitalistic when it is exactly the opposite. We're trying to generate greater competition.

In my view, the abusive dominance standard was written by Americans when they brought antitrust to Europe after World War Two. When I read your bill, it looks to me like it is actually restoring some of the antitrust standards that we used to have in this country in the 1950s and 1960s. It doesn't look like it's out of the American tradition at all.

Sen. Gianaris: That's exactly right. And I think that opponents of it are struggling to explain themselves. They can’t say, “We want a system are only four or five players controlling everything,” because that is absurd on its face. So they're falling back to suggesting we're trying to damage our economy, when we’re actually trying to update our laws in a way that reflects the modern economy, and, frankly, pushes back against some court decisions that have narrowed dramatically the ability take on powerful firms.

Do you see that as part of the broader national and global push on concentrated tech firms and also monopoly?

Sen. Gianaris: I certainly hope so. In addition to the state attorney general, who had a very large hand in helping us develop this proposal, we’ve worked with a number of the groups in Washington, as you well know, who are also engaged with Senator Klobuchar and a number of folks in Congress.

You're going further than congressional proposals and other antitrust laws around the country. Are you hoping to set a standard for other states?

Sen. Gianaris: Certainly, you know, we're very much aware of the broader conversation going on around this issue. I think New York has something specific to say about it. And we're certainly trying to drive the debate in the right direction.

Thanks for the conversation.

Once again, here’s where you can help. If you’re a New Yorker, write your representative in the state assembly and ask them to support SB 933. Doing so actually matters, because unlike members of Congress, state legislators care if they get just a few emails from constituents. You can find and write your Assembly member here: And if you don’t live in New York state, my guess is you know someone who does. So forward this issue to them!

Australia Forced Google and Facebook to Pay for News... And They Did: Back in February, a fight over an Australian law mandating that dominant platforms negotiate with media companies over ad revenue came to a head. Facebook threatened to pull out of Australia, Tim Berners-Lee said the law could fundamentally break the internet, and commentators like Mike Masnick falsely claimed that the law would impose a ‘link tax.’

As I noted, the law merely forced big tech firms to negotiate on equal terms with media outlets over traffic, ad money, and data by imposing an arbitration requirement. And guess what? It worked.

Here’s the Financial Times:

“We are on track for deals all around. It’s been a big success,” Sims said in an interview. “We are just about there and the media companies are happy — and that’s the key point.”

Sims made the comments after confirmation from Nine Entertainment that it had signed a multiyear content deal with Google and Facebook. The company, owner of the 190-year-old Sydney Morning Herald, did not release commercial terms of the agreement but forecast that its publishing unit’s earnings would jump in the 2022 financial year.

Australia’s other big media groups, including News Corp, Seven West Media and state broadcaster ABC, have either completed content deals with Facebook and Google or signed letters of intent to do so.

Dozens of smaller publishers have also struck agreements or are negotiating terms following passage of a law in February designed to make Big Tech pay for news.

It’s not just a big media success story; small publications seem to be getting deals. That said, I still want to understand more about how this law is working. Australia isn’t the best test case, because its media ecosystem is highly concentrated. Still, from these initial indications, this experiment seems to show that credible media outlets offer value that Facebook and Google were appropriating because they had superior bargaining power. Once you take some of that bargaining power away, the revenue flows change.

Private Equity and the Hacking of the New York Subway System: I’ve written about the dangers of private equity owning cybersecurity firms, noting that the massive Solar Winds hack was a result of a bad ownership structure leading to the gutting of spending on security. The trend of more leveraged buyouts in this space isn’t slowing; in fact, Thoma Bravo partners - which owns Solar Winds - just snapped up cybersecurity and compliance firm Proofpoint for a little over $12B.

And just as the roll-ups aren’t ending, neither are the hacks. Last week, the New York Times reported that Chinese hackers got into the New York subway systems computer systems in April. This time, it wasn’t Solar Winds. As Christina Goldbaum and William K. Rashbaum reported, hackers “took advantage of vulnerabilities in Pulse Connect Secure, a widely used connectivity tool that offers workers remote access to their employers’ networks.”

Pulse Connect Secure is also a private equity firm. Pulse is owned by Ivanti, a software roll-up controlled by two giant PE funds, Clearlake Capital Group and TA Associates. And yes, once again, this seems to be a typical PE roll-up situation, with upper management ruining the product quality, offshoring jobs and firing people, and just generally destroying enterprise value. Here’s a typical Glassdoor review at Ivanti.


This company used to be the mature example of a software company. Former C-Suite cared about their employees, they were willing to adjust to changing conditions and they got to know who we are. The former leadership team was that...a team, and they included all of us in it. The previous CMO was amazing, he knew his team and their capabilities. He made us want to work harder not because we were in fear, but because we were loyal to him and we know he cared.


The current leadership group is there to squeeze anything they can out of that company. They are all there to make the most of the shares they own and care little about the future of the organization. All that they have done was divide the organization. They've hampered creativity and production. Literally, everyone on my team lived day to day in fear. It's no way to live. They think nothing (and this really happened) of laying off a sales leader, just to bring them back, just to lay them off again. That's a MESS! They won't promote current employees, in fact, they seem to revel in the idea that they are hiring outside of little Utah. I have known rockstar leaders who were ready for a promotion that weren't even allowed to interview.

The story is likely similar to Solar Winds - a badly managed company that doesn’t deal with problems so its owner can suck out cash. The problem isn’t just unhappy employees, but easier entry for hackers. And we will eventually learn this lesson, the easy way or the hard way.

Thanks for reading. Send me tips on weird monopolies, stories I’ve missed, or comments by clicking on the title of this newsletter. And if you liked this issue of BIG, you can sign up here for more issues of BIG, a newsletter on how to restore fair commerce, innovation and democracy. If you really liked it, read my book, Goliath: The 100-Year War Between Monopoly Power and Democracy.


Matt Stoller

P.S. As always, my favorite part of this newsletter is seeing your emails and comments. A few days ago I got a note from a reader discussing the shortage of a bowel prep drink Golytely, which I mentioned back in February.

Hi Matt,

I remember in a previous newsletter you mentioned the Golytely shortage for colonoscopy prep, and how people were using miralax plus Gatorade as a substitute. I'm scheduled for a C-section today, and instead of getting the clearfast nutritional drink 2 hours beforehand, they just gave me an apple juice in my surgery prep kit. I think clearfast is by the same manufacturer as miralax (bevmd) and I wonder if there's a monopoly there too, related to a shortage.


Interesting question! There are plenty of shortages these days.