Week in Review

IN THE NEWS

• Federal workers missed another paycheck this week due to the government shutdown, which has now lasted for more than a month. President Donald J. Trump postponed his State of the Union address after U.S. House of Representatives Speaker Nancy Pelosi (D-Calif.) declined to authorize the use of the House Chamber for the speech until the government is reopened. Although the House passed a spending bill to reopen the government, two similar votes in the Senate failed.
• The U.S. Supreme Court granted a stay of two district court orders that blocked the Trump Administration’s ban on transgender people serving in the military. Lt. Col. Carla Gleason of the U.S. Department of Defense stated that the department was “pleased” with the order, adding that it is “critical” that the department “implement…policies that it determines are necessary” to ensure the effectiveness of the armed forces. House Armed Services Committee Chairman Adam Smith (D-Wash.) stated that he would continue to fight the ban, calling it “an arbitrary, discriminatory directive.”
• The Supreme Court will hear a challenge to a New York City rule banning residents from transporting certain guns to homes and shooting ranges outside the city. The U.S. Court of Appeals for the Second Circuit had earlier held that the rule was constitutional because it did not “impose a substantial burden” on Second Amendment rights. The Supreme Court will likely not decide the case until the spring of 2020.
• France’s data protection agency, the Commission Nationale de l’Informatique et des Libertés, fined Google €50 million for handling personal data in a way that violated the European Union’s General Data Protection Regulation (GDPR). Google reportedly stated it would appeal the fine, reportedly asserting that the company “worked hard to create a GDPR consent process.” Google also reportedly expressed its concern over how the ruling will affect companies around the world.
• Several U.S. consumer privacy groups urged the Federal Trade Commission (FTC) to break up Facebook’s ownership of Instagram and WhatsApp. The groups, led by the Electronic Privacy Information Center, claimed that Facebook’s handling of data from WhatsApp breached the terms of a 2011 agreement with the FTC; the agreement settled charges that Facebook engaged in deceptive privacy practices. The groups also argued that the breakup of Facebook would “restore competition and innovation for Internet messaging and photo app services.” Separately, the FTC is reportedly preparing to fine Facebook for violating the 2011 agreement.
• An Iowa state trial court judge ruled that the state’s recently passed law prohibiting abortions “upon the detection of a fetal heartbeat” violated the Iowa Constitution. Judge Michael Huppert found the law unconstitutional under the Iowa Supreme Court’s interpretation of the state constitution’s due process and equal protection clauses. The law “would relegate the individual rights of Iowa women to something less than fundamental,” Judge Huppert wrote.
• Because of the partial government shutdown, biotechnology company Gossamer Bio filed an initial public offering (IPO) using a little-used part of federal securities law. Under Section 8(a) of the Securities Act, a fixed-price IPO registration takes effect 20 days after filing—without requiring approval from the U.S. Securities and Exchange Commission, which cannot approve other forms of IPOs during the shutdown. Gossamer stated that it will reconsider its Section 8(a) IPO if the federal government reopens before the filing’s 20 days are up.
• A bipartisan group of members of the U.S. House of Representatives introduced a bill that would make it illegal to deal in shark fins. Delegate Gregorio Sablan (I-Northern Mariana Islands), one of the leaders of the group, stated that the “strong” support for the bill “sends a clear message that we have to pay more attention to protecting the Earth’s oceans.”
• CBS will not air a proposed Super Bowl advertisement for medical marijuana, reportedly stating that its “broadcast standards” prohibit “cannabis-related advertising.” Harris Damashek of Acreage Holdings, the company that proposed the ad, reportedly characterized the advertisement as a “public service announcement” and said it would likely be posted online soon, even if it could not air during the Super Bowl.

WHAT WE’RE READING THIS WEEK

• Prescription drug markets present unique regulatory challenges because prescribing doctors do not pay for medications, and medication users have limited ability to choose their drugs, argued Rutgers Law School professor Michael A. Carrier and Steve Shadowen of Hilliard & Shadowen LLC in a recent article for Antitrust. This type of market can result in anticompetitive pricing and incentives for “product hopping”—when a drug company reformulates an existing medication and encourages doctors to prescribe the new version—Carrier and Shadowen explained. To address these issues, the authors proposed a new framework “that takes into account the regulatory regime and realities of pharmaceutical competition” and can help identify anticompetitive behavior by pharmaceutical companies.
• Online retailers may soon charge prices specific to a person, a practice that will require regulation, wrote Marc Borreau of France’s Telecom ParisTech and Alexandre de Streel of Belgium’s University of Namur in a note for the Competition Committee of the Organization for Economic Co-operation and Development’s Directorate for Financial and Enterprise Affairs. Borreau and de Streel explained that regulating personalized pricing would involve consumer protection rules, data protection rules, competition protection rules, and anti-discrimination rules. They also recommended that any regulation “empower the consumers” by making it clear that prices are tailored to the person and maximizing the choices in retailers available to consumers.
• A report by The Guardian alleged that tobacco companies are fighting cigarette regulations with the help of free-market think tanks after finding that over one hundred think tanks in two dozen countries had accepted money from big tobacco. Jessica Glenza of The Guardian observed that the tobacco industry has increasingly favored donating to “libertarian and free market organizations,” who have opposed heavy tobacco regulation. Tobacco companies reportedly rejected suggestions of a conflict of interest. “Ideas are not for sale,” Marlboro manufacturer Philip Morris reportedly said.