Welcome to The Corner. In this issue, we take a closer look at whether Trump tariff policies are the only reason Europe might moderate a key carbon pricing mechanism, which lies at the heart of its climate change policy.

Open Markets Files Brief in Supreme Court Case on Illegal Firing of FTC Commissioners

The Open Markets Institute filed [[link removed]] an amicus brief in the Supreme Court case Trump v Slaughter, defending Congress’s authority under the Constitution to restrict the President’s ability to remove officials at executive agencies and departments. The brief, written by OMI’s policy counsel Tara Pincock, argues that Congress, under the Necessary and Proper Clause of Article I, has broad powers to structure the federal government and ensure that the execution of the law remains independent from direct presidential control. The lawsuit was filed after President Trump illegally fired Democratic Federal Trade Commissioners Rebecca Slaughter and Alvaro Bedoya in March. Read the brief here [[link removed]].

Open Markets Files Brief Defending Ohio’s Right to Designate Google as a Common Carrier

The Open Markets Institute filed [[link removed]] an amicus brief in State of Ohio v. Google, urging the Fifth District Court of Appeals of Ohio to recognize the state’s authority to designate Google Search as a common carrier — just as courts and legislatures have long done for railroads, telegraphs, telephones, and other corporations that hold themselves out to serve the public. The brief traces more than three centuries of the common carriage doctrine, which establishes that when a company dedicates its services to public use, courts and legislatures can require it to operate in the public interest and without discrimination. “Google is the modern equivalent of the railroad or telegraph monopolist,” said Open Markets policy counsel Tara Pincock, who wrote the brief. Read the brief here [[link removed]].

As Europe Retreats on Carbon Pricing, German Business May be a Bigger Factor Than Trump Tariffs

With the new year, the European Union is poised to implement its Carbon Border Adjustment Mechanism (CBAM). A cornerstone policy of Europe’s Green Deal, the policy introduces a price on the carbon content of certain imports, thereby pushing companies from around the world to reduce their emissions.

Beyond its importance to the global fight against climate change, many Europeans have embraced CBAM and the other Green Deal policies as a strategic foil to the Trump administration’s zero-sum, climate-denialist vision for the global economy — a big carrot to his stick. However, following Trump’s tariff threats and other U.S. attacks on the foundations of European democratic governance, European Commission leaders have recently appeared poised to dramatically cut back elements of the Green Deal and of their broader defense of a rules-based international order.

The European Green Deal consists of numerous policy mechanisms [[link removed]] designed to make the EU carbon neutral by 2050. Beyond reducing the climate impact of activities taking place inside European borders, many of these policies make increased sustainability a precondition for companies that want to trade with European consumers.

The Corporate Sustainability Due Diligence Directive (CSDDD), for example, requires large companies operating in or exporting to the EU to disclose the environmental impacts of their global supply chains, and to adopt a climate change mitigation strategy. CBAM, meanwhile, extends the EU’s domestic cap-and-trade mechanism to foreign producers by taxing carbon-intensive products like steel when they cross the EU border.

Although EU leaders argue the Green Deal consists of climate rather than trade [[link removed]] policies, mechanisms like CSDDD and CBAM represent innovative means of wielding the EUs economic power to influence global industrial practices. First, by requiring that foreign producers meet the same climate standards and frameworks as firms operating in Europe, these policies remove industries’ economic incentives to offshore production to countries with lower environmental standards. Second, these policies directly incentivize companies and countries to raise their sustainability standards to facilitate their access to the European market. Several countries [[link removed]] are adopting their own carbon trading systems in response to CBAM, effectively extending the impact of this policy to products that will never enter the European market.

Nevertheless, precisely because of their international impact, Europe’s climate policies have also caused disputes with its trade partners — especially the U.S., which lacks climate policy equivalents to those enacted in Europe. Even during the Biden administration, negotiations to support Euro-American production of low-carbon steel and aluminum foundered in large part over disagreements [[link removed]] on whether or not domestic U.S. producers should, like EU producers, face higher sustainability standards.

Now, the Green Deal has run headlong into the Trump administration’s “America First” vision for the global economy. Not only does Trump oppose the basic objective [[link removed]] of climate change mitigation, he more broadly sees other countries’ regulation of U.S. companies as “unfair” attempts to restrict their global market share.

Republican leaders argue that policies like CSDDD violate American sovereignty [[link removed]] by forcing U.S. companies to meet higher European regulatory standards. They also warn that companies cannot comply with EU disclosure requirements without violating state anti-ESG laws [[link removed]] that restrict companies’ right to consider climate in their business decision-making.

The resulting U.S. trade policy is just as globally ambitious as Europe’s, but aims in the opposite direction. Whereas EU policies create positive incentives for others governments to raise regulatory standards, Trump has used the threat of exorbitant tariffs and other retaliations to force governments to remove or reform domestic regulations [[link removed]], as well to dismantle multilateral agreements [[link removed]], to fit with present U.S. goals.

So far, in the fight between these two global visions, Trump’s strategies have appeared more powerful, at least on the surface. This summer, EU negotiators exited negotiations with the Trump administration having agreed [[link removed]], among other concessions, to “reduce the administrative burden” of policies like CBAM and CSDDD.

The idea that Europe is simply caving to Trump is not entirely accurate, however. Trump’s demands for climate policy has many supporters in Europe. Indeed, European business lobbyists [[link removed]], especially from sectors like agriculture [[link removed]], have been among the loudest voices calling for a rollback of EU climate policies.

If anything, the real danger to European sovereignty and democracy may come from EC President Ursula von der Leyen’s willingness to depict the policy rollback as a gift to Trump [[link removed]]. The seeming capitulation risks emboldening the U.S. administration to continue to use tariffs as a blunt tool to get its way in other policy areas, like tech.

Perhaps even more dangerous, von der Leyen had to ally herself with far-right parties [[link removed]] in the European Parliament to win enough votes to weaken the climate regime. Not only did the move violate decades-old pro-democracy norms against centrist parties voting with the far right on any issue, it reinforced the alliance between the Trump administration and Europe’s far right movements.

📝 WHAT WE'VE BEEN UP TO: Writing in The New Republic [[link removed]], Open Markets Institute legal director Sandeep Vaheesan and coauthor Johanna Bozuwa of the Climate and Community Project argue that tackling America’s soaring electricity costs requires restructuring the opaque seven regional transmission organizations that oversee much of the nation’s electrical system. “Transmission organizations should be public bodies leading the transition to an affordable, reliable, and sustainable power system, not private clubs obstructing it,” Vaheesan wrote.

Open Markets policy counsel Tara Pincock released a statement [[link removed]] criticizing a U.S. district court’s decision in the Federal Trade Commission’s antitrust case against Meta, which she said erroneously concludes that the monopolist competes against TikTok and YouTube. Arguing the FTC should never have approved Meta’s purchases of WhatsApp and Instagram, Pincock said, “Now, as the agency works to correct that mistake, the court has effectively declared it ‘too late’ because Meta is supposedly no longer a monopolist. That is wrong on both the facts and the law.” Common Dreams [[link removed]] covered Pincock’s statement.

Hudson Valley One [[link removed]] quoted Open Markets chief economist Brian Callaci in coverage of Kingston’s debate over tenant protections and housing policy. Callaci recommended that city officials rely on the 2020 Census study as a valuable snapshot for understanding local vacancy rates and shaping equitable housing decisions.

Open Markets Europe director Max von Thun applauded the European Commission for investigating Amazon and Microsoft for their dominance of cloud computing services under the Digital Markets Act, saying, “Europe’s dependence on a handful of U.S. tech giants for essential cloud infrastructure undermines the continent’s competitiveness, its resilience and its sovereignty.” His statement was covered by Tech Policy Press [[link removed]] and International Business Times UK [[link removed]].

Von Thun issued a statement calling on the European Commission to reject a “paltry” counteroffer by Google to the EU’s proposed remedies for the tech giant’s dominance of digital advertising, which includes a $3.5 billion fine and a threat to break up the corporation. “The only credible solution is a forced divestment of part of Google’s advertising business — anything else is just window dressing,” von Thun said in response to Google’s offer to make technical fixes.

Center for Journalism and Liberty at Open Markets director Courtney Radsch issued a statement [[link removed]] condemning Nexstar Media Group’s proposed $6.2 billion merger with Tegna, which would give the company control over TV stations reaching more than half of U.S. households. “The only reason Nexstar is trying this is because they think they can trade friendly coverage for a greenlight to tighten their control over America’s airwaves,” she said.

Radsch also welcomed [[link removed]] a Spanish court’s decision ordering Meta to pay $550 million to digital media outlets for the illegal use of their data, which undermines the economic viability of journalism.

Open Markets food program director Claire Kelloway published an expert brief [[link removed]], “Creating Fair Food Markets for Affordable Groceries,” outlining how policymakers at all levels of government can hold dominant food corporations to account, including by opening public grocery stores. “This brief shares how to make public grocery stores work and offers a few additional top policy levers for reining in corporate price hikes that NYC Mayor-elect Zohran Mamdani — and just about any policymaker — can use,” Kelloway said.

🔊 ANTI-MONOPOLY WINS:

The nation’s biggest apartment rental corporation, Greystar, agreed to pay $7 million to settle a case brought by nine state attorneys general that claimed the giant landlord’s use of rent-setting software RealPage violates laws against price collusion. As part of the settlement, Greystar agreed to end use of all similar software across its properties. ( Associated [[link removed]] Press [[link removed]])

France is expanding an existing investigation into Elon Musk’s X platform to include allegations that Grok, Elon Musk’s AI chatbot, made statements denying the Holocaust. The chatbot said in French that the gas chambers at the Nazi death camp Auschwitz-Birkenau were used for disinfection rather than for mass executions. ( The [[link removed]] Guardian [[link removed]])

Department of Justice assistant attorney general Gail Slater announced that the agency is engaged in an extensive review of potentially anti-competitive behavior across agricultural markets, including for seeds, fertilizer, and fuel. ( Competition [[link removed]] Policy International [[link removed]])

South Korean antitrust authorities are investigating UK microchip design corporation Arm Holdings over licensing practices for its chip architecture that clients claim are anti-competitive. ( Reuters [[link removed]])

We appreciate your readership. Please consider making a contribution to support the continued publication of this newsletter.

DONATE [[link removed]] 📈 VITAL STAT: $7 billion

The amount Novo Nordisk has offered to buy biotech startup Metsera in a deal competitor Pfizer says is anticompetitive. Pfizer has filed a lawsuit alleging that Novo Nordisk is attempting to “capture and kill” Metsera in a bid to dominate the surging obesity drug market. ( Washington [[link removed]] Post [[link removed]])

📚 WHAT WE'RE READING:

The Philosopher in the Valley: Alex Karp, Palantir, and the Rise of the Surveillance State [[link removed]] - New York Times Magazine writer Michael Steinberger pulls back the curtain on Palantir’s powerful and secretive surveillance empire, tracing the rise of the controversial data corporation from its early startup days in 2003 to its current state as an arbiter for the most sensitive data of America’s surveillance state and its largest corporations, with special attention paid to the eccentric beliefs and cutthroat behavior of its cofounder and CEO Alex Karp.

Pre- Order Chief Economist Brian Callaci's new book:

Open Markets Institute’s chief economist Brian Callaci will publish [[link removed]] his first book Chains of Command: The Rise and Cruel Reign of the Franchise Economy on April 20 through University of Chicago Press. The book offers a sharp critique of the franchise model used by many fast food chains, which has shaped labor markets, corporate power, and inequality in the U.S. In Chains of Command, Callaci shows how franchisors have altered the legal treatment of corporations in their favor through a decades-long crusade of lobbying and litigation, and argues for greater cooperation between workers and small franchise owners. Pre-order the book here [[link removed]].

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Written and edited by: Barry Lynn, Austin Ahlman, Ezmeralda Makhamreh, Anita Jain, and XXXX.

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