“`html
From Matt Stoller www.thebignewsletter.com/…
In 1990, during a Senate race in North Carolina, Jordan made a notable statement explaining his lack of involvement: “Republicans buy sneakers, too,” he remarked. A few years back, he elaborated on his decision to stay apolitical while many high-profile athletes chose to engage. “I never considered myself an activist,” he stated. “I saw myself as a basketball player.”
It is significant that one of the richest and most recognized athletes worldwide is leveraging this specific legal approach. One reason is Jordan’s consistent avoidance of political issues.
The racing team owned by Mr. Jordan, 23XI, has initiated a private lawsuit alleging that NASCAR employs monopolistic strategies to dominate the stock car racing sector.
“I have a deep love for racing and the enthusiasm of our supporters, but the current management of NASCAR is unjust to teams, drivers, sponsors, and fans,” he expressed in a statement. “This action today demonstrates my commitment to advocating for a competitive marketplace where everyone benefits.”
Mr. Stoller recently joined the NPR program, On Point, to discuss Biden’s impact on antitrust matters and whether the ongoing antitrust momentum is merely a fleeting phenomenon that could easily be reversed by an incoming administration.
Several other private actions are currently navigating the judicial system. These range from Fubo blocking a collaboration among Disney, Fox, and Warner Bros, to Particle suing the electronic medical records giant Epic Systems, a successful private lawsuit against Google concerning app stores, as well as various lawsuits against the cheerleading monopoly Varsity Brands, and </
A private action that government officials cannot impede or expedite is at play here. Michael Jordan holds the reins, not Lina Khan or Jonathan Kanter. Jordan’s decision to pursue this lawsuit indicates a strong likelihood of success, supported by his attorney, Jeffrey Kessler, who specializes in antitrust and sports law and boasts an impressive track record.
Jeffrey Kessler is the attorney renowned for dismantling the NCAA’s dominance over ‘student athletes’ in the landmark 2021 Supreme Court case, Allston v. NCAA. This case has catalyzed a surge of populist ideology making its way through the judiciary.
By examining this specific complaint against NASCAR, we can better understand the rise of private rights of action within the courts. A few months ago, Antitrust Division head Jonathan Kanter defeated Google in court, setting a precedent recognized by lawyers like Kessler. To appreciate the implications, we must delve deeper into the case details.
In this lawsuit, Mr. Jordan accuses NASCAR of obstructing the emergence of competing top-tier stock car racing series, thereby ensuring it remains the sole venue for racing teams. This monopolistic power enables NASCAR to underpay participating racing teams, securing substantial revenues while leaving these teams—regardless of star drivers—struggling to avoid bankruptcy. Since 2004, NASCAR events have dominated attendance, with seventeen of the top twenty attended sporting events being NASCAR races, surpassing even the Super Bowl.
NASCAR maintains its monopoly on stock car racing by acquiring potential rivals that could challenge its leading position. In 2018, NASCAR purchased the Automobile Racing Club of America (ARCA), a possible contender, and that same year, it also acquired the International Speedway Corporation, which owned major venues like Daytona International Speedway and Talladega Superspeedway.
The operation of top-tier raceways involves substantial costs. Managing safety, infrastructure, track surfaces, promotional activities, mechanical facilities, insurance, guest services, and staffing with experienced personnel results in extremely high barriers to entry. Moreover, racetracks not owned by NASCAR are under strict contracts, which prevent independent tracks from hosting races featuring potential rivals, as a stipulation for holding NASCAR events. This leads to most of these tracks being idle for the majority of the year.
The racing teams face exploitation by NASCAR while being restricted from competing in alternative events. The complaint states, “Teams are now required to invest millions in car parts specified by NASCAR, but they neither own these parts nor can they use the cars built with these parts in any other racing events.” Furthermore, teams are also required to agree to non-compete clauses.
Interestingly, there are parallels between NASCAR’s business practices and Google’s recent legal defeat concerning its operations.
Google disseminates its search engine through costly phone operating systems and browsers, owning a major OS, Android, along with the Chrome browser. Additionally, it has agreements with Apple, Mozilla, Verizon, and others to make its search the default and to block the distribution of competing search engines. These maneuvers
To operate a genuine racing car series, a substantial number of users and data is essential, along with 18 to 24 events annually. If Google’s actions are deemed unlawful, then the same applies to NASCAR, or so the argument goes.
In conclusion…
For nearly two decades, genuine cases of monopolization were scarce, leading lawyers to easily dissuade private lawsuits by claiming that they would likely result in costly failures. Antitrust laws were perceived as obsolete, with predictions that courts would dismiss them entirely; essentially, antitrust was regarded as a “dead letter.” However, following Google’s classification as a monopolist, a surge of cases began to emerge. Monopolization has regained its status as illegal, and it’s evident that judges are surprisingly receptive to antitrust claims, contradicting prior beliefs. (Just today, a judge ruled against Ticketmaster regarding an important procedural issue.)
This shift can largely be attributed to Jonathan Kanter at the Antitrust Division, whose notable impact includes reviving this legal domain with lawsuits against Google, Live Nation/Ticketmaster, Visa, and Apple, culminating in the first significant DOJ monopolization victory in two decades.
Lastly:
While appeals in these cases are to be expected, it is unreasonable to presume that these appeals will weaken the law rather than strengthen it. Furthermore, as more cases progress through the judicial system, various forms of monopolization will be more closely examined. For example, the FTC has filed a lawsuit against pharmacy benefit managers for manipulating insulin prices for insured individuals. This type of scheme mirrors the practices of Safelite, which provides glass benefit management services for auto insurers and directs customers to its own shops when they have insurance. If pharmacy benefit managers are prohibited from self-dealing, the same should apply to Safelite and other companies engaged in similar practices. (Reports suggest this is widespread in certain medical fields.)
In addition, just earlier this week, the Federal Trade Commission achieved a significant victory in court against Amazon, where Judge John Chun concluded that yes, <a href="https://www.thebignewsletter.com/p/the-ftc-sues-to-break-up-am
Defining the limits of monopolization law is complex. Amazon will likely contend that competition exists, pointing out that third-party sellers have alternatives and that companies like Temu and Shein represent viable competition, among others.
I don’t want to exaggerate the situation. For pharmacies battling Pharmacy Benefit Managers (PBMs), publishers contending with Google, or merchants reliant on Amazon, the challenges keep mounting. Newspapers are continuously shutting down, and so too are pharmacies; even CVS is closing stores.
Moreover, monopolists, even while facing scrutiny, continue to behave aggressively. Recently, an Amazon merchant reached out to share his frustrations about new fees imposed on him. These include charges related to inventory management, penalties for holding too much or too little inventory (‘Low Level Inventory Fee’), new fees for processing returns, and pressure to purchase stamps from an Amazon-acquired company called ‘Veeqo.’ As he expressed, “it feels like Amazon employs numerous MBAs who solely focus on devising new fee structures, showing little to no regard for how these changes impact the marketplace and sellers.” Consequently, he pointed out that operating costs are escalating across the board. So, he asks, “what do you think will happen to PRICES?”
The current landscape reflects this dynamic. Legal advancements are underway, with antitrust lawyers and business leaders increasingly taking action against coercive practices in the economy. However, the pace of these changes is not quick enough to avert widespread damage. Still, significant positive shifts are on the horizon, especially with Google remedies anticipated shortly. As more decisions transition from the courts to tangible changes, we should witness a reduction in coercive tactics and a rise in open, fair competition. That is undoubtedly a positive development.
Furthermore, while the incoming administration may influence the speed of this change, it cannot halt it altogether. While Michael Jordan didn’t win every game, the reason he boasts six NBA championships is clear.
Thank you for reading. I welcome your tips on unusual monopolies, stories I may have overlooked, or your feedback by clicking on the title of this newsletter. If you enjoyed this issue of BIG, consider signing up <a href="http://email.mg1.substack.com/c/eJxVUMFuwyAM_ZpwjIAmYT34UHXtb0QEnBSNQARmVf5-pN1hkyzberae37PRhEtMOxBmYiVjGp0FZoEradTEXB7nhLhq54FtZfLOaHIxHFtC9LJjDzhxNUs7nKTlnGsthRKDmj-s4dIYO0i2xUyjLtZhMAj4jWmPAZmHB9GWm9OlkfcaqybKFL3H1OYy
Issues of BIG, a newsletter focused on the restoration of fair commerce, innovation, and democracy, are explored in depth. If you found this interesting, I encourage you to read my book, Goliath: The 100-Year War Between Monopoly Power and Democracy.
Capitalism functions effectively only when there is genuine competition within the marketplace…
Michael Jordan’s Antitrust Battle: Challenging Monopoly Practices in NASCAR and Beyond
Overview of the Antitrust Lawsuit
Michael Jordan, a global sports icon and co-owner of the NASCAR team 23XI Racing, is at the forefront of a significant legal battle against the National Association for Stock Car Auto Racing (NASCAR). Alongside another team, Jordan’s 23XI Racing has filed a federal antitrust lawsuit, claiming that NASCAR engages in anti-competitive practices that harm teams and limit their ability to compete fairly.
Understanding Antitrust Laws
Antitrust laws are designed to promote fair competition and prevent monopolistic practices. They aim to protect consumers and ensure that various businesses can compete on equal footing. In the case of NASCAR, the lawsuit raises questions about whether the organization’s rules and regulations give it undue power over teams, effectively stifling competition.
The Key Allegations
- Monopolistic Control: The lawsuit alleges that NASCAR maintains monopolistic control over the sport, which restricts other racing teams’ ability to thrive.
- Anti-Competitive Practices: Specific practices are highlighted as detrimental to competition, including exclusive sponsorship deals and revenue sharing that disproportionately benefits NASCAR.
- Impact on Team Operations: The claims suggest that these practices limit teams’ operational freedom and financial viability, particularly for new entrants in the market.
The Implications for NASCAR and Its Teams
NASCAR’s response to this lawsuit could significantly impact how the sport operates. If the court finds that NASCAR has violated antitrust laws, it may lead to changes in the way the organization structures its relationships with teams and sponsors.
Potential Consequences of the Lawsuit
- Financial Repercussions: A ruling against NASCAR could result in substantial financial penalties and necessitate changes to their business model.
- Team Empowerment: A successful lawsuit may empower smaller teams, allowing for greater competitive balance within the sport.
- Changes in Regulations: The case could prompt NASCAR to revise its regulations to foster a more equitable environment for all teams.
Michael Jordan’s Role and Influence
As one of the most recognized athletes globally, Michael Jordan’s involvement in NASCAR brings a unique perspective to the lawsuit. His celebrity status and business acumen could attract further attention to the issues at hand, potentially influencing public opinion and the future direction of NASCAR.
Jordan’s Business Philosophy
Jordan’s approach to business emphasizes fairness, competition, and innovation. His team, 23XI Racing, reflects these values, aiming to provide opportunities for diverse drivers and teams. This lawsuit aligns with his commitment to challenging the status quo and advocating for a level playing field in sports.
Broader Context: Antitrust Issues in Sports
The challenges faced by NASCAR are not unique. Various sports leagues have grappled with antitrust issues, as teams and leagues navigate the balance between maintaining competitive integrity and ensuring profitability.
Case Studies in Sports Antitrust
Sport Issue Outcome NBA Salary Cap Regulations Led to changes in player contracts and team operations. NFL Television Contracts Increased revenue sharing among teams. MLB Player Free Agency Revisions to free agency rules to allow greater player movement. Benefits of Fair Competition in Sports
Promoting fair competition in sports leads to numerous benefits, including:
- Increased Fan Engagement: A competitive landscape often results in more exciting games, attracting larger audiences.
- Enhanced Talent Development: When teams operate on a level playing field, there is greater incentive to develop and nurture talent.
- Market Growth: Fair competition can lead to increased sponsorship opportunities and commercial growth across the industry.
Practical Tips for Advocating Fair Practices in Sports
For fans and stakeholders looking to support fair practices in sports, consider the following:
- Stay Informed: Regularly follow news related to sports governance and organizational practices.
- Engage with Community: Join forums and discussions advocating for fair competition in sports.
- Support Teams and Athletes: Choose to support teams and athletes who prioritize integrity and fairness.
First-Hand Experiences and Perspectives
Many stakeholders within the racing community have shared their experiences regarding the competitive landscape in NASCAR. Drivers, team owners, and fans often express a desire for greater transparency and fairness in the sport. This lawsuit has opened up conversations about what it means to compete and thrive in a high-stakes environment.
Voices from the NASCAR Community
- Team Owners: Many have echoed concerns about NASCAR’s control over resources, suggesting that a change is necessary for the health of the sport.
- Drivers: Some drivers have spoken out about the challenges they face due to the current competitive structure.
- Fans: A growing number of fans are advocating for reforms that promote equity and excitement in the races.
Looking Ahead: Future of NASCAR and Antitrust Regulations
The outcome of Michael Jordan’s antitrust battle could set a precedent not only for NASCAR but also for other sports leagues facing similar scrutiny. As discussions regarding fairness and competition continue, stakeholders from all sides are keenly watching how this lawsuit unfolds.
