Tag: corpocracy

The European nations are gunning hard for Big Tech:

US crowdfunding platform GoFundMe was handed down a hefty fine by the Italian competition regulator, which found its advertising and the way it takes a cut from donations to be deceptive and a violation of consumer rights.

The platform was ordered to pay €1.5 million ($1.8 million) for hiding the costs of donations from Italians using it to fund various causes. The California-based company was accused of deceiving people about how much they would actually pay when donating through the platform, by hiding transaction fees and the voluntary ‘tips’ that went to the company itself.

The platform had a default setting for how big its cut from each donation would be and saw its share of donations plummet as soon as it set it to zero for new campaigns after the Italian probe was launched.

The Italian Competition Authority (AGCM) started an investigation into GoFundMe Ireland Ltd, the international operator of the crowdfunding site, in March. It responded to hundreds of complaints from Italian citizens, who accused the company of falsely advertising its services as free.

The authority confirmed that there was a basis for the complaints. GoFundMe advertised itself as allowing fundraising “at no cost” on its front page and elsewhere. In practice, donors would pay extra on top of whatever amount they would type in on a campaign page. Part of this hidden cost is a transaction fee, which amounts to 2.9 percent of the donation amount plus €0.25 ($0.30) per donation, but for some campaigns, an extra may be billed as a “tip” to GoFundMe itself.

As you see, there are numerous angles of attack against the lawless Big Tech corporations. And even their home court turf of the California Superior Courts isn’t anywhere nearly as friendly as it used to be. 

No wonder Silicon Valley was so willing to break the law in order to try to dethrone the God-Emperor. They know they won’t be permitted to keep parasitizing the real US economy much longer.

Forty-six states and the Federal Trade Commission have filed massive antitrust lawsuits against Facebook, seeking to force the company to divest major acquisitions such as Instagram and WhatsApp.

One suit filed on Wednesday in U.S. District Court for the District of Columbia is spearheaded by New York Attorney General Letitia James, leading a coalition of 46 states as well as Washington DC and Guam. 

The lawsuit alleges that, over the last decade, Facebook illegally acquired potential competitors in a ‘predatory’ manner in order to dominate the market, and asks the court to consider splitting up the company by unwinding those deals.

That’s great, but I’d rather see the FTC ditch Section 230, then break up the online advertising duopoly of Facebook and Google. 

There will be no avoiding the corporate cancer for those who seek public financing:

It has taken a long time, but conservatives are finally beginning to comprehensively reject the idea that corporacracy is capitalism. And Alex Macris contemplates how corpocracy can become a form of legalized tyranny that deftly eludes the constitutional protections previously enjoyed by Americans:

If you’ve read the Parable of the Seasteader, you’ll already know that at sufficient scale the public/private distinction collapses — a private entity of sufficient size can have all the power of a public entity. It is certainly arguable that Facebook and Google have reached such size. Here, however, I want to discuss a different dilemma – government’s use of private entities to regulate freedoms it cannot directly abridge.

We’re going to look at one specific right (the right to free speech) and one specific set of Federal regulations (§ 1604.11) but the pattern I’m describing here has become ubiquitous in our country. Nowadays, almost anything government is forbidden to regulate, it can require corporations to regulate for it. The government has outsourced tyranny. Let’s see how this black magic is performed….

Government cannot regulate your expression of your viewpoint – but corporations can.

Most people understand that the First Amendment does not apply to private actors on their private property. A person or corporation can choose to allow free speech in their home or business, or can choose to regulate free speech, even viewpoints, as they deem. This “exception” to the First Amendment has been the case since the foundation of Anglo-American law, and it is absolutely necessary to protect the rights of property owners.

For instance, if I am running a bicycle shop, I am absolutely permitted to prevent my employees from putting up posters that say “bicycles suck” or telling my customers to “buy a scooter.” Likewise, if I am running a video game news site, I am absolutely permitted to tell my journalists not to write about the beauties of Sistine Chapel instead. And if I invite you to my home to binge-watch Babylon 5, and you express the offensive viewpoint that Star Trek is better, I am altogether within my rights to make you leave.

Admittedly, there have been occasional exceptions to this rule under the so-called state actor doctrine. Most notably, the US Supreme Court ruled in Marsh v Alabama (1946) that the First Amendment fully applied to expressive activities on the company-owned sidewalks and streets of a company-owned town. The precedent of Marsh v Alabama was expanded in Amalgamated Food Employees Union v Logan Valley Plaza (1968) then overturned in Hudgens v NLRB (1976). Since Hudgens, the state actor doctrine has waned in importance, despite numerous conservative efforts to sue online platforms.

We will put aside the so-far toothless Section 230 for a discussion another day. In general, private corporations can regulate the expression of viewpoints, even though government cannot, and that’s the law.

In Fact, Private Abridgment Is Often Required!

What most people don’t understand, however, is that private actor aren’t just free to regulate viewpoint. They are required by government to regulate viewpoints. What a paradox! Government can require a private actor to undertake regulation over speech that the government couldn’t itself take? Yes!

There is more, there is a lot more, there for the reading. 

Joe Biden is publicly called out for lying about his connections to his son’s business dealings on Tucker Carlson:  

Bobulinski and Hunter formed a company in 2017, specializing in infrastructure investment. No deals appear to have been completed, and the firm folded in 2018. Joe had left the White House and was a private citizen at the time. Nevertheless, he has insisted he and his son never discussed business – which Bobulinski claims is untrue. 

‘That’s a blatant lie when he states that,’ Bobulinski told Carlson. ‘It’s a blatant lie. It was made clear to me that Joe Biden’s involvement was not to be made in writing, but only face to face.’

Bobulinski is listed as one of the recipients of a May 13, 2017, email detailing their business deal, and he claims that ‘the big guy’ mentioned is a reference to Joe, whom he claims Hunter regularly asked for business advice. 

Joe has always insisted he was not involved in Hunter’s numerous business ventures. 

It should be interesting to hear how the Bidens otherwise account for the massive payments made to Hunter by a variety of foreign sources. It’s not as if the guy isn’t a complete screwup totally incapable of doing legitimate business to save his life. 

These are direct, credible, and easily provable allegations. And given the other Hunter Biden scandal, there can be little doubt about them being true.

But even if this is true, a corporate rededication to Mammon isn’t going to work, because they’re only attacking the symptoms, not the disease:

According to a source that has been reliable in the past, the sh-t is about to hit the fan at Disney,” says Doomcock. “I am told that getting the SJWs out of Disney is now priority one mandated by the sudden realization that sometimes cliches are cliches for a reason and a new understanding at the highest level that ‘get woke go broke’ is no longer just a slogan. Yes, you heard me right, as incredible as it sounds, my source boldly claims that Disney is now only concerned with one thing: profitability.”

Doomcock continues: “The proclamation is about to be sent out from on high to every corner of the enchanted kingdom: Disney is a for-profit business moving forward and from here on out the customer comes first. The woke party is over because the mouse is awakened with a terrible hangover and it’s a new day at Disney. My source tells me that huge policy changes are about to be made at Disney: Bad-mouthing fans no matter what they say or what side they are on will no longer be tolerated. That goes for everyone that works at Disney. Everyone. Including Brie Larson. Including the LucasFilm story group. And everyone that Kathleen Kennedy ever hired.”

Doomcock goes on to give examples of people at Disney attacking fans including Rian Johnson, Kathleen Kennedy, Brie Larson and Taika Waititi.

“I’ve been told explicitly that even someone like Brie Larson will no longer be able to work at Disney if she takes shots at fans,” says Doomcock. “The slack attitude and tacit support implied by silence that emboldened these woke wonders to highjack a corporate message and subvert corporate profits is no more. The LucasFilm story group will no longer be empowered to humiliate Luke Skywalker to strike a blow against the patriarchy. No more will Nick Fury be humiliated by having a pet cat take out his eye. ‘Get woke go broke’ is a phrase that resonates with Disney now and positive changes are on the way if this leak is true.”

The corporate cancer isn’t about how you treat or regard the fans, not at its core. It’s about what your position is on the Good, the Beautiful, and the True. It’s about your perception of your mission. Amazon is profitable. Apple is profitable. And yet they have planted the seeds of their eventual destruction, because Man does not live by money alone.

UPDATE: A Disney employee doubts the reliable source.

Since the furloughs happened in April, we’ve had 0 discussions about how the company will operate moving forward, what people who have been furloughed can do to get back to work, new efficiencies the company plans to take to stave off the bloodletting, or how we as employees can pivot our skills to be more valuable in the future. We HAVE, however, had many internal meetings about diversity and the need to look beyond traditional leadership strategies.

Translation: nothing changes. The corporate cancer continues to metastasize.

The Legal Legion continues to #crush. More about this on the Darkstream tonight.

UPDATE: Dear Gammas. You can’t force a reset on my Unauthorized password by requesting it. I know it looks like you can, but you can’t. And yes, we anticipated you would try that.

UPDATE: Oh, Sweet Saint Justinian. I’m told those morons on Reddit actually think that the Bears’ arbitrations were dismissed as well as Owen’s. Not only were those 90+ arbitrations not dismissed, not only are they not frivolous, but every single one of them is likely to be found to be in default as per the recent US District Court ruling in Dekker, and at least 72 of them are almost certain to be awarded damages due to Patreon’s catastrophic decision to twice violate its own Terms of Use and its waiver of group action.

Lawyer and YouTuber Viva Frei acquired a complete copy of the original backer arbitration claims – courtesy of the Norton Law Firm – and analyzes them as well as the judge’s final ruling on the preliminary injunction:

And there you have it, a thorough update and breakdown of the Patreon lawsuit and a further illustration of the fact that when you’ve stepped in poop, sometimes the best thing to do is stop walking around and tracking it everywhere. Patreon definitely stepped in poop, and by the way of their highly-questionable amendment after the fact to try to undo their own mistake, I think they have just tracked poo-poo all over their house, in their bedroom, in their bed, on their pillowcase… the poop is everywhere!

He was clearly impressed by the case constructed by the LLoE, as he described it as “very intelligent” and even “genius”. And this didn’t even begin to get into the poop-tracking accomplished by the filing of the lawsuit and its inevitable consequences in the form of the amended claims by the 72 Bears being sued.

I have to admit, I initially assumed that Patreon was unexpectedly handed an advantage on at least one of the outstanding issues by a ruling from the California Supreme Court this week:

California recognizes two different torts involving interference with economic relations – interference with performance of a contract and interference with prospective economic advantage.  Originally California courts treated these two torts as essentially the same, the the only difference being that interference with contractual relations required the existence of a binding contract.  In 1995, however, the Supreme Court held that a plaintiff pursuing a claim for interference with a prospective contractual or economic relationship had to plead that the defendant’s conduct was wrongful.  Della Penna v. Toyota Motor Sales U.S.A., Inc., 11 Cal. 4th 376 (1995).

Contracts that are terminable at-will occupy a sort of middle estate between these two torts, leading to the question of whether a plaintiff pursuing a claim for tortious interference with an at-will contract must plead that the interference was independently wrongful.  Yesterday, the California Supreme Court held that tortious interference with an at-will contract does require independent wrongfulness. Ixchel Pharma, LLC v. Biogen, Inc., 2020 Cal. LEXIS 4876.

Although the Court recognized that in an at-will contract the parties have more of an expectation of continuity of the relationship than when no contract exists, it found that there is no legal basis in either case to expect continuity from the perspective of a third-party.  The Court also found that legitimate business competition could be chilled if independent wrongfulness is not required.

As I commented on SocialGalactic, this particular decision by the California Supreme Court looked unfavorable to Big Bear on first glance, as well as almost comically untimely. However, it did at least serve to demonstrate that his case was very far from frivolous, considering that the court appeared to be addressing, for the first time, one of the primary issues at dispute in his arbitration.

Upon the LLOE’s review of the ruling, however, it quickly became apparent that despite its apparent relevance to his case, the Ixchel decision actually has nothing to do with Big Bear’s claim for tortious interference on the part of Patreon. This is for four reasons:

1. As defined by the supreme court, an at-will contract requires mutual bargaining by the parties. The Patreon Terms of Use are a contract of adhesion that prevents bargaining and is unilaterally imposed upon one party by the other, so they are not an at-will contract.
2. An at-will contract is, by definition, terminable at will by either party. The Patreon Terms of Use cannot be terminated by the user. Even if a user deletes his account, he remains bound indefinitely by the terms. So, again, the Patreon Terms of Use are not an at-will contract.
3. Patreon did not terminate its contract with Big Bear or even delete his account. What they did was delete his creator page, deny his access to the platform, and prevent patrons from paying him.
4. The Ixchel decision is not analogous to Patreon’s contract with Big Bear, but with Big Bear’s separate contractual relationships with his patrons.

Their losses are not only accumulating, they are accelerating. Which is more than a little fascinating in light of what I wrote in Corporate Cancer concerning the Devil Mouse.

Debt, diversity, and the Devil Mouse

Investors often say that which cannot continue will not. But as one influential economist who was also a highly successful investor noted, “the market can stay irrational longer than you can stay solvent.” So, we can’t expect to know exactly when a converged company is going to succumb to the corporate cancer that has infested it. There is an awful lot of ruin in companies as big and resource-rich as Apple, Disney, Google, Intel, or Microsoft; a single disaster, or even a single series of disasters is probably not going to be sufficient to do them in.

But if the precise end of a converged company cannot be foreseen, the beginning of the endgame often can be. This is because a corporate failure cascade, or a process in a system of interconnected parts in which the failure of one or more parts triggers the failure of other parts, is often observable by even casual observers.

For example, Disney looks indomitable when seen from a distance. It has a market capitalization of nearly $250 billion and in 2018 reported an annual profit of $12.6 billion on $59.4 billion in revenue. It owns a veritable gold mine of intellectual property, from Mickey Mouse to Star Wars, and is arguably the most formidable entertainment empire in the history of the world to date.

But look a little closer and a less imposing picture begins to take form. In just the last year, Disney’s debt has increased by $38 billion, to a total of $53 billion now owed. And while that figure is considered low by industry standards, it has amassed that gargantuan debt to pay for projects that are already failing at an rate that is extremely uncharacteristic of historical Disney projects.

Consider, too, that Netflix now owes $12.4 billion in debt with $15.8 billion in annual revenue, so despite Disney’s low debt/equity ratio of 0.38, it has a debt/revenue rate of 89.2 percent, which is actually higher than the notoriously unstable Netflix’s 78.4 percent.

Star Wars isn’t the only one of Disney’s once-dominant properties and franchises that are failing. The two Galaxy’s Edge theme parks were failures at launch, attendance is declining at both its flagship parks, and ESPN has been losing two million subscribers a year for the last seven years.

Although it has ridden the Marvel Cinematic Universe—which it did not create—to record-breaking box office heights, its attempt to mine its rich cartoon franchise for live action films has not panned out very well when corrected for inflation—the 1994 Lion King made $178 million more than its 2019 remake—and its attempts to create new franchises that can be similarly exploited have repeatedly failed.

On the other hand, Disney is still generating mammoth profits, its seemingly endless series of remakes are profitable, and the launch of its new Disney+ streaming channel could lead to a whole new period of growth for the entertainment giant. Then again, the decision to retroactively censor old films from Song of the South to Dumbo and The Lady and the Tramp tends to suggest that convergence will cause Disney+ to disappoint too.

In the end, it is probable CEO Bob Iger’s declaration that the corporation’s push for more diversity in its entertainment products will be followed by an increase of diversity in its executive suite before he retires that will prove the most reliable guide for the future of Disney as well as a test of the central thesis of this book.

There are only three possibilities, after all. Either social justice convergence is beneficial for business, it is harmful for business, or it is irrelevant. And at this point, it should be eminently clear that is about as good for the average corporation as cancer.

Are we seeing the beginning of a series of convergence-related failure cascades across corporate America? Disney may prove to be a useful harbinger in this regard.

Remember, that was all written before Corona-chan devastated Disney’s vital parks business. So let’s look at what is happening of late on the Devil Mouse front:

Analyst Rich Greenfield recently looked at Disney and ESPN’s reports and found very troubling numbers for the sport network and its parent company. ESPN’s loss in subscribers is also shocking for its size. The loss of subscribers continues and is down another six percent year-over-year. So far, this year’s subscriber loss has accelerated over past years. The sports network was down 4.5 percent in the first quarter, off 5.5 percent in the second quarter, and down a whopping 6 percent in the third quarter. Indeed, the six percent decline ESPN saw in the third quarter this year is just part of the declines suffered in every quarter at since the third quarter of 2016.

ESPN+ ARPU down 22{4e01b0bc4ab012654d0c5016d8cbf558644ab2e53259aa2c40b66b3b20e8967d} year-over-year, as it is basically being given away within the Disney/Hulu/ESPN+ bundle. $4.18 vs. $5.33 last year. How do you make money at $4.18 of $ARPU? 

That 6-percent Q3 decline suggests that ESPN will be down to 78 million subscribers by the end of the year, down from 99 million in 2013. It certainly looks like a corporate failure cascade in progress. And while there is a LOT of ruin in the Devil Mouse, the speed at which its debt is accumulating means that it might not take as long as you would assume for that debt to become unserviceable. I haven’t run the numbers yet, so I don’t know how long it might take to go critical, but the fact that Disney is already running a higher debt/revenue ratio than Netflix is an ominous indicator.