What You Should Be Reading: March 2024

Welcome back to “What You Should Be Reading,” the monthly blog series about fascinating new public-policy works that deserve your attention.

March 2024’s objects of fascination include reflections on common carriage and free speech, the oft-forgotten benefits children find online, and new data that suggest the Federal Trade Commission’s case against Amazon is bunk.

So, without further ado, here’s what you should be reading from last month.

Christopher S. Yoo: “What’s in a Name? Common Carriage, Social Media, and the First Amendment”

In the Northwestern University Law Review, law professor Christopher Yoo examines whether social media platforms conform to any cognizable definition of common carrier. The legal question has gained salience as Republican legislatures in Texas and Florida – frustrated by social media platforms’ perceived anti-conservative bias – declared large platforms to resemble, or to be, common carriers. Both states did so to justify imposing viewpoint-neutral content-moderation policies. Many Republican lawmakers seem to believe the imposition of common carriage nullifies the First Amendment scrutiny that generally attaches to attempted speech regulation.

Not so fast, says Yoo. “In the end, social media does not fall within existing statutory or common law definitions of common carrier,” he writes. “Moreover, even if they did, the factors defining this legal category would not have any effect on the First Amendment analysis.”

Common carriage–style classification is a messy and inconsistent affair. It has shifted across time and industries. However, at every turn, social media lacks the various traits typically associated with the label. Although social media exists within the communications industry broadly (a sector in which regulators have often imposed common carrier requirements), “it is hard to see why [that] mere fact…would alter the First Amendment analysis,” Yoo writes.

Yoo examines the statutory history and caselaw at length. In no instance does this record suggest that a state, simply by applying a specific label to a company, can rob that company of its speech rights. As he argues, “handwaving attempts to associate the regulation of social media with the historical pedigree of an old body of law do not obviate the need for careful application of established principles of the First Amendment to each emerging set of facts.”

Read the full piece here.

Cato Institute: “Courts Should Affirm First Amendment Rights of Youths in the Digital Age”

To a bipartisan coalition of concerned legislators, the internet provides no benefits to – and inflicts many harms on – minors. These politicians often advocate barring children from social media altogether, or at least barring them absent parental consent (as manifested in recently enacted statutes in such states as Florida and Utah).

However, this perspective ignores the many goods the internet provides children, argues the Cato Institute’s Jennifer Huddleston. She continues, “Any proposals must also consider the harms to young people by limiting their access to online media.”

Minors – particularly those with uncommon interests or social needs – often discover community, information, and creative outlets in the digital world. For many, the internet’s minute barriers to entry enable economic opportunities that do not exist offline. As Huddleston writes, “Prohibitions take away the ability of young people to engage in potential discourse more broadly and would mean that they would once again find their opportunities for speech limited – not by their parents or invested adults – but by the government.”

Advocates of removing children from social media often handwave First Amendment objections with the assertion that children do not enjoy significant speech rights. This, as Huddleston details at length, ignores substantial Supreme Court caselaw to the contrary. These cases concern K–12 student censorship (e.g., Tinker v. Des Moines Independent Community School District) as well as media-related restrictions on minors (e.g., Brown v. Entertainment Merchants Association). The precise limits of children’s rights on social media remain somewhat unclear, however. “The exact nature of these rights may vary with a minor’s age, but in other scenarios, courts have been able to make such distinctions in ways that recognize both parental rights and a minor’s own autonomy while also recognizing the need to restrain the government from violating the young person’s underlying rights,” Huddleston argues.

After reading this report, a social media skeptic could still conclude that, notwithstanding Huddleston’s arguments, government should bar children from social media (a position to which the Taxpayers Protection Alliance would forcefully object). However, policymakers should understand the good things, along with the bad things, that regulation would prevent. As economist Thomas Sowell put it, “There are no solutions. There are only tradeoffs.”

Read the full piece here.

Phoenix Center: “Amazon: A Monopolist That Undersells Its Competitors?”

The Federal Trade Commission (FTC) sued Amazon last year, accusing the marketplace of maintaining an illegal monopoly. Amazon, the agency alleges, gouges its third-party sellers with fees and raised prices for consumers. According to George S. Ford (chief economist of the Phoenix Center), neither accusation can withstand scrutiny. Besides underselling Target and Walmart, Amazon imposes seller fees that “are highly comparable” to those imposed by the two old-school retailers. What’s more, Ford writes, “Amazon’s consumer prices and its fees to third-party sellers are consistent with other online marketplaces with smaller market shares.” As TPA has noted elsewhere, Amazon’s business model favors small entrepreneurs unlike any in traditional retail.

Ford’s data suggest that Amazon’s prices, when averaged, undercut those of Target and Walmart by 3.5 percent. The gory details provide further insights:

Relative to Walmart, over 43 weeks and for 15,080 products, Amazon’s prices are lower 31.2% of the time, higher 13.1% of the time, and equal 55.6% of the time. When Amazon’s prices are lower, the percentage price difference is 20.8% and when higher the difference is 14.7%. Comparing Amazon’s prices to Target’s prices, over 42 weeks and for 10,879 products, Amazon’s prices are lower 47.1% of the time, higher 15.2% of the time, and equal 37.7% of the time. When Amazon’s prices are lower, the percentage price difference is 16.1% and when higher the difference is 16.9%, so the price differences are nearly symmetric. Amazon’s prices are lower for more products than they are higher with a ratio of nearly 3-to-1. Equal prices are common. There is no evidence to suggest that Amazon is “overcharging its customers” as the FTC claims.

Antipathy for Amazon and other Big Tech companies so often rests on unsubstantiated impressions, not empirical evidence. This methodological laziness has permeated even the FTC, an agency putatively led by rigorous and unbiased economics experts. Amazon will have many days in court in what’s likely to be a protracted trial, however, and it will have the necessary economic data to refute the FTC’s distortions.

Read the full piece here.

Note: TPA highlights research projects that contribute meaningfully to important public-policy discussions. TPA does not necessarily endorse the policy recommendations the featured authors make.