fbpx

Month: September 2020

Bahaya Pelarangan dan Perdagangan Gelap

Perdagangan gelap dan barang-barang ilegal merupakan salah satu permasalahan besar yang hingga saat ini masih terus terjadi di dunia. Melalui maraknya perdagangan gelap, bukan hanya para pedagang barang-barang yang legal yang dirugikan, tetpai juga para konsumen, karena mereka akan mendapatkan dan mengkonsumsi barang-barang yang tidak diregulasi dan tidak jarang juga sangat berbahaya.Pada tahun 2012 misalnya, lembaga Perserikatan Bangsa-Bangsa (PBB) yang menangani isu-isu mengenai kriminalitas, United Nations Office on Drugs & Crime, memberi estimasi nilai perdagangan ilegal internasional sebesar USD870 miliar. Angka tersebut tentu merupakan jumlah yang sangat besar.Tidak seperti yang mungkin dibayangkan oleh sebagian kalangan, perdagangan gelap yang trejadi di berbagai belahan dunia tidak hanya melibatkan zat-zat psikotropika yang berbahaya dan juga barang-barang mewah, namun juga berbagai barang-barang sederhana yang mudah kita jumpai dan kita gunakan sehari-hari. Produk-produk pakaian sehari-hari misalnya, dan produk-produk pangan misalnya, juga merupakan barang-barang yang dijual di banyak pasar gelap.Produk-produk tembakau misalnya, juga merupakan salah satu produk yang kerap diperjualbelikan di pasar gelap. Tidak bisa dipungkiri bahwa produk-produk tembakau merupakan produk yang memiliki dampak buruk bagi kesehatan penggunanya. Hal ini tentu berpotensi kian diperparah bila produk-produk tembakau tersebut didapatkan di dalam pasar ilegal yang tidak diregulasi oleh pemerintah dan tidak dapat dicek dan diketahui keamanannya bagi konsumen.Bank Dunia (World Bank) memberi definisi perdagangan ilegal tembakau sebagai seluruh kegiatan menjual, mendistribusi, dan membeli produk-produk tembakau yang dilarang oleh hukum. Hal tersebut termasuk juga pemalsuan dan pembajakan produk tembakau tertentu, dan juga menyelundupkan produk-produk tersebut (World Bank, 2019).

Sebagaimana produk-produk ilegal lainnya, produk-produk tembakau ilegal yang beredar di pasar juga umumnya memiliki harga yang jauh dibawah dengan produk-produk legal yang diregulasi oleh pemerintah. Berdasarkan laporan World Bank tahun 2019 lalu, Produk-produk tembakau yang dijual di Brazil dan Argentina misalnya, memiliki harga 50% lebih murah dibandingkan dengan produk-produk tembakau yang legal. Hal yang sama juga terjadi di Paraguay, yang perbedaan harganya mencapai 67% Di negara tetangga kita, Malaysia, harga produk-produk tembakau ilegal memiliki perbedaan 55% dari harga produk-produk yang legal (World Bank, 2019).Peredaran produk-produk tembaau ilegal bukan hanya masalah yang dihadapi oleh negara-negara berkembang di kawasan Asia atau Amerika Latin. Negara-negara dunia pertama di Eropa misalnya, juga menghadapi permasalahan tersebut. Organisasi Uni Eropa yang menangani kasus-kasus korupsi dan kriminalitas, European Union Anti-Fraud Office (OLAF), memberi estimasi pasar tembakau ilegal di negara-negara Uni Eropa pada tahun 2020 sebesar 10 miliar Euro (Consumer Choice Center, 2020). Aktivitas dari perdagangan produk-produk tembakau ilegal bukan hanya dapat semakin membahayakan konsumen-konsumennya yang mengkonsumsi produk-produk ilegal tersebut, akan tetapi aktivitas tersebut juga memberi keuntungan kepada organisasi-organisasi kriminal (organized crimes). Menteri Kesehatan Italia mislanya, pada tahun ini menyatakan bahwa aktivitas perdagangan ilegal produk-produk tembakau telah memberikan pemasukan dua kali lipat bagi organisasi-organisasi kriminal di negaranya, yang sebelumnya hanya mendapatkan pemasukan dari penjualan zat-zat psikotropika ilegal seperti heroin dan kokain (Consumer Choice Center, 2020).

Ada beberapa dampak yang signifikan dari marak dan banyaknya produk-produk tembakau ilegal, sebagaimana yang dicatat oleh World Bank. Selain masalah kesehatan, sebagaimana yang sudah diungkapkan sebelumnya, di mana produk tembakau memang secara saintifik berbahaya bagi kesehatan dan hal tersebut akan kian diperparah dengan prduk-produk ilegal yang tidak diregulasi, produk-produk tembakau ilegal juga akan memiliki dampak yang signifikan terhadap anak-anak di bawah usia (World Bank, 2019).Untuk peredaran dan pasar produk-produk tembakau yang legal misalnya, pemerintah dapat memberlakukan serangkaian regulasi yang ketat, baik di distributor ataupun di pertokoan, untuk memastikan produk-produk tembakau tersebut tidak jatuh ke tangan dan dikonsumsi oleh anak-anak dibawah usia. Bila ada distributor atau toko yang melanggar aturan tersebut, dan mengizinkan anak dibawah usia membeli produk-produk tembakau yang dijual, maka pemerintah dapat memebri sanksi mulai dari denda sampai dengan pencabutan izin usaha.Hal sebaliknya terjadi di dalam pasar tembakau ilegal. Karena aktivitas tersebut dilakuakan secara sembunyi-sembunyi dan berada diluar regulasi pemerintah, maka pemerinath tidak bisa membelakukan serangkaian regulasi penting yang ditujukan untuk melindungi anak-anak dibawah usia untuk mendapatkan produk-produk tembakau. Anak-anak dapat dengan mudah mendapatkan produk tersebut langsung dari para penjual ilegal. Hal ini tentu akan menimbulkan masalah yang sangat besar yang memiliki dampak yang sangat negatif terhadap kesehatan anak-anak.Lantas, apakah yang bisa kita lakukan untuk menanggulangi aktivitas perdagangan ilegal produk-produk tembakau yang sangat berbahaya tersebut? Ada beberapa solusi yang sangat penting untuk diperhatikan dan dilakukan oleh para pembuat kebijakan demi mencegah dan mengurangi aktivitas-aktivitas tersebut. Hal pertama yang paling jelas adalah jangan sampai harga produk-produk tembakau yang legal menjadi meningkat sehingga semakin sulit diakses dan didapatkan oleh masyarakat, terutama masyarakat dari kelas menengah ke bawah.Salah satu hal yang menarik para konsumen untuk membeli produk-produk ilegal, produk apapun itu, baik fashion, pangan, barang-barang elektronik, dan lain sebagainya, termasuk tentunya produk-produk tembakau, adalah produk-produk tersebut memiliki harga yang jauh dibawah dibandingkan dengan produk-produk legal. Dengan menaikkan harga produk-produk legal tertentu yang beredar di pasar, maka hal tersebut akan semakin memberi insentif kepada konsumen untuk membeli dari pasar gelap yang ilegal.Indonesia misalnya, merupakan salah satu negara dengan jumlah perokok terbesar di dunia. Jumlah perokok di negara kita sejumlah lebih dari 65 juta jiwa, atau 34% dari keseluruhan penduduk Indonesia. Dari jumlah tersebut 70% dari perokok di Indonesia berasal dari Rumah Tangga Miskin (Detik.com, 27/08/2016).

Hal tersebut tentu merupakan hal yang sangat penting untuk diperhatikan oleh para pembuat kebijakan industri tembakau, terlebih lagi bila para pembuat kebijakan akan memberlakukan kebijakan untuk menaikkan harga produk-produk tembakau, salah satunya adalah melalui kenaikan biaya cukai. Pada tahun 2020 ini misalnya, pemerintah membelakukan kenaikan cukai rokok yang tertinggi setidaknya sejak tahun 2013 (Katadata.co.id, 2020). Mereka yang paling terkena dampaknya tentu adalah masyarakat yang berpenghasilan rendah dan menegah ke bawah.Dampak dari kebijakan kenaikan cukai rokok yang akan semakin memberi insentif konsumen membeli produk-produk tembakau di pasar ilegal juga merupakan hal yang diungkapkan oleh Aliansi Masyarakat Tembakau Indonesia (AMTI). Yang paling dirugikan, selain konsumen dalam hal ini, juga para produksen dan pekerja yang bekerja di industri tembakau (CNN Indonesia, 10/09/2019). Kebijakan lainnya yang harus diperhatikan adalah tidak memberlakukan kebijakan yang sudah terbukti negara-negara lain gagal dalam menekan peredaran produk-produk tembakau, salah satunya adalah kebijakan kemasan polos. Kebijakan kemasan polos, atau yang dikenal juga dengan plain packaging policy, adalah kebijakan yang melarang setiap produksen produk-produk tembakau untuk menampilkan brand dan logo mereka di depan bungkus produk tersebut, dan digantikan dengan kemasan polos berwarna hitam yang tidak bergambar.Australia merupakan negara pertama yang memberlakukan kebijakan plain packaging pada tahun 2012. Pada tahun 2014, jumlah produk tembakau ilegal yang disita oleh aparat keamanan Australia sebesar 182 ton. Jumlah tersebut semakin meningkat di tahun 2017 menjadi 381 ton (Forbes, 01/21/2017). Kebijakan tersebut sudah terbukti gagal dan justru semakin meningkatkan peredaran produk tembakau ilegal yang sangat berbahaya bagi konsumen.

Sebagai penutup, perdangan produk-produk ilegal, termasuk produk-produk tembakau, merupakan permasalahan besar yang melanda berbagai negara di seluruh dunia. Jangan sampai, justru kebijakan-kebijakan yang dimaksudkan untuk menanggulangi dampak negatif dari tembakau malah berdampak pada peningkatan peredaran produk-produk ilegal, dan semakin memberi insentif bagi konsumen untuk membeli produk di pasar gelap, yang tentunya sangat berbahaya.

Originally published here.

Millones de exfumadores podrían recaer si se prohíben los sabores en el vapeo

Una nueva investigación publicada por el Consumer Choice Center (Centro de Elección del Consumidor) y World Vapers Alliance (Alianza Mundial de Vapeadores) muestra que 15 millones de exfumadores de ocho países podrían volver a fumar si se promulgan las prohibiciones de los sabores del vapeo de nicotina.

El informe “Why Vape Flavors Matter?” analizó la situación en 8 países (Estados Unidos, Canadá, Holanda, Polonia, Alemania, Francia, España, e Italia). De acuerdo con este, hay tres consecuencias negativas de prohibir los sabores en el vapeo:

1. La prohibición llevará a los vapeadores a comprar productos de vapeo con sabor en otras jurisdicciones legales;
2. Los vapeadores podrían recurrir a comprar productos de vapeo con sabor en el mercado ilegal;
3. Los vapeadores podrían volver a fumar.

El análisis también encontró que los vapeadores que usan sabores distintos a tabaco son 230% más propensos a dejar de fumar que aquellos que usan solo sabores de tabaco. 

Reacciones al estudio

Michael Landl, director de la Alianza Mundial de Vapeadores, dijo que “prohibir los sabores tendría un efecto profundamente negativo en la sociedad, empujando a los fumadores de vuelta a los cigarrillos o al peligroso mercado negro. El vapeo es una herramienta muy eficaz para dejar de fumar y los sabores son una parte integral del éxito. La prohibición de los sabores podría hacer que millones de exfumadores volvieran a tomar el hábito”.

David Clement, director de Asuntos Norteamericanos del Consumer Choice Center, añadió: “Lo que queremos que la gente, especialmente los legisladores, reconozcan es que los sabores que se van formando no solo tienen que ver con el sabor y la comodidad para los usuarios adultos: son un factor importante para que la gente deje de fumar de forma tradicional”.

En el informe también se examinan otras consecuencias negativas de la prohibición de los sabores. Estas incluyen acceder a los mercados negros o fabricar sus propios líquidos de vapeo. Esto último puede ser muy peligroso si la persona no cuenta con el conocimiento y los ingredientes adecuados. 

“Sabemos que las prohibiciones de los sabores reavivan los problemas de la prohibición, lo cual es un neto negativo para la sociedad, tanto en lo que respecta a la actividad delictiva como a la seguridad de los consumidores”, dijo Yaël Ossowski, director adjunto del Consumer Choice Center. “A la luz de todas estas pruebas, países como los Países Bajos o Dinamarca deben reconsiderar sus planes sobre las prohibiciones de los sabores y, en su lugar, facilitar al máximo a los fumadores el cambio a alternativas menos perjudiciales en comparación con el tabaquismo”, dijo Michael Landl.

Originally published here.

Open Letter to the Members of the Board of the WTO

To the attention of Mr. Tim Yeend,
Chef de Cabinet and Principle Advisor to Director-General
World Trade Organization

Bruxelles, 16 September 2020


Subject: On the risk of TRIPS to create regulatory barriers to medical innovation

Dear Mr. Tim Yeend,

In light of the “vaccine nationalism” and buy-outs of the broad-spectrum antiviral medication “Remdesivir”, much of the emphasis on intellectual property issues revolved around coronavirus has focused on immunizations and medicines, and we couldn’t stand aside from
this timely discussion.

Earlier this month, South Africa issued a communication titled “Beyond Access to Medicines and Medical Technologies Towards a More Holistic Approach to TRIPS Flexibilities.” It was pointed out that the COVID-19 response required looking beyond patents towards a more “integrated approach to TRIPS flexibilities that include other various types of intellectual property (IP) rights including copyrights, industrial designs and trade secrets” (IP/C/W/666).

“TRIPS flexibilities” that are usually used to refer to exceptions allowing countries to override global IP rules for public health reason have been used mainly in regard to patents. However, as the communication argues, the scope of the flexibilities should also be extended
to other various types of intellectual property (IP) rights including copyrights, industrial designs and trade secrets. As such, the recommendations submitted by South Africa are cross-field as they also touch upon the production and distribution of essential medical devices such as masks, ventilators, and personal protective equipment.

The risk of TRIPS is to create regulatory barriers that go well behind the pharmaceutical industries. Some examples of innovations that are supposed to be shared but face regulatory barriers go beyond pharmaceuticals to AI algorithms for apps and 3D-printed ventilator valves.

As a quick reminder, this can include so-called compulsory licensing when a government authorizes a manufacturer to copy another’s patented medicine. There are other grey areas still to be addressed over compulsory licensing as well as there are many ways to make easier access to vaccines: for example, a mutual recognition of FDA and EMA and other agencies and fast-tracking procedures for some type of medicines.

During tough times, decision-makers are requested to restore certainty to the greatest extent possible. Moreover, this crisis compels us to be one step ahead and anticipate issues.

Looking forward to your swift reaction,
Gianna GANCIA MEP
Anna BONFRISCO MEP
Fulvio MARTUSCIELLO MEP
Massimiliano SALINI MEP
Matteo ADINOLFI MEP
Salvatore DE MEO MEP
Antonio Tajani MEP
Hermann Tertsch MEP
Marlazy Aguilar MEP
Ivan Stefanec MEP
Stefania Zambelli MEP
Fred Roeder, managing director of the Consumer Choice Center

September 2020

Back to school, back to Parliament, back to work!

It’s definitely a bumpy ride with COVID-19, but we here at the Consumer Choice Center have been working very hard over the summer to keep you more connected and with more choices. Let me give you a guided tour of some of our recent work. Buckle up, it’s quite a ride!


European Airport Index: the Winner is Zurich this year!

As the continent is slowly getting back into travel mode, our 2020 edition of Europe’s most passenger-friendly airports could obviously not be missed. This year’s winner is Zurich Airport! I’m sure you’ll want to know where your closest airport is ranked in Europe’s 30 biggest airports, so click HERE to get straight to the research by Fred Roeder and Tamar Tarsaidze.


Let Brazil create!

The CCC has started a new campaign in Brazil to fight for innovation and against scrapping the provisions of Article 40 protecting intellectual property. Our colleagues Fabio Fernandes and Fred Roeder lead the way in showing legislators that legislative proposals are going off the rails, and how they would hurt consumers. For Brazilians, make sure to follow our Brazilian CCC account HERE.

Also related to intellectual property: Together with 11 Members of the European Parliament, we have signed a letter regarding the TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights) flexibilities.

Sustainable food is great

We all want sustainable agriculture, but how do we achieve that? My newest policy note on sustainable agriculture is a toolkit for policy-makers, to make them understand how evidence-based policy-making leads to affordable and safe food that does not overuse natural resources. You can read the full paper HERE.


You might also be interested in an op-ed I wrote about the threat to human health posed by mycotoxin contamination in Parliament Magazine.


Fred Roeder made it all the way into Germany’s prestigious FAZ on sustainability and modern agriculture.


Consumer Choice Radio

We also had the great pleasure to host Kathleen Hefferon PhD from the Department of Microbiology at Columbia University on our very own Consumer Choice Radio. In our interview, we tried to make sense of the opposition to evidence-based policy-making.


Flavours matter

Vape flavours are more than just a gimmick — they are essential tools to help smokers make the switch to vaping products if they choose to do so. In their most recent policy note “Why Flavors Matter” (link), David Clement, Yaël Ossowski, joined by Michael Landl from the World Vapers Alliance make their case that restricting flavoured vaping liquids is the wrong way to go.

Read the paper HERE.


Parlo Italiano?

Not all of us do, but either way it’s a bliss to listen to Luca Bertoletti give his take on VAT holders bonuses in Italy. Did the Italian pension office violate the privacy of millions of Italian? Listen to these two interviews to understand more about this!


The California Fight for Freelancers

The Consumer Choice Center has joined a coalition mi to pass Proposition 22 in California (Yes on Prop 22) that would overturn parts of the anti-freelance and anti-contractor AB5 law for rideshare drivers. We’re the only consumer group that has signed up, and you’ll see much more in the coming months as we push to pass this proposition.

In that spirit, my colleague Yaël Ossowski published an op-ed on a similar topic impacting all of us stuck at home: commission caps on delivery apps. A coalition of groups wants cities to intervene in the delivery app market and dictate prices. That’s bad for consumers and means the cost of getting food to your door will be more expensive. Check out his article for more.


Make restaurants fun again

Over 29 per cent of restaurant owners cannot make a profit during COVID-19, with 60 per cent saying they’ll need to shut down within 90 days if the pandemic continues. In his recent op-ed for the Financial Post, David Clement argues for changes that would not only alleviate burdens on restaurant owners, but also on consumers. 

Here’s a snippet: “If we are going to nudge people back to restaurants, let’s make restaurants fun and affordable again. Simple changes could go a long way to avoiding mass restaurant bankruptcies.”


Argentina gets it wrong

“The Argentinian government will finally need to implement pro-free market reforms instead of holding onto socialist policies such as price controls on telecom services.” Our colleague Maria Chaplia didn’t mince her words on Argentina’s planned price freeze telecommunications services. Luca Bertoletti added: “Argentina deserves better than a populist government that pretends to act in the interests of consumers by extending price controls of TV, internet and mobile services at the expense of future prosperity.” It’s FIRE and we like it! 🔥


Let us know if you have any ideas on what we should be focusing on in the future!

Bill Wirtz

Safeguarding IP rights is key to defeating COVID-19

COVID-19 has exposed our unpreparedness for a crisis of global scope. As much as globalisation is partly to blame for the virus’ speedy expansion, it is also thanks to the interconnectedness of our world that we have been able to preserve international trade – despite a bundle of constraints and cries for protectionism – during these tough times. In particular, that has to do with exports of essential medical devices such as masks, ventilators, personal protective equipment. The shortages experienced by many countries have triggered an intergovernmental discussion on the scope of compulsory licencing and IP protection covered by The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). 

As a global consumer advocacy group, we at the Consumer Choice Center are hereby sharing our perspective on the matter in the hope to contribute to this timely debate. 

The TRIPS agreement is an integral part of the World Trade Organisation’s intellectual property legal base. Among other things, the agreement whose primary aim is to safeguard intellectual property rights, also includes provisions on compulsory licencing, or use of subject matter of a patent without the authorisation of the right holder (Article 31). Essentially, this means that “in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use,” a Member government may allow someone else to produce a patented product or process without the consent of the patent owner. 

Whereas, under normal circumstances, the person or company applying for a licence must have first attempted, unsuccessfully, to obtain a voluntary licence from the right holder on reasonable commercial terms (Article 31b). However, there is no need to try for a voluntary licence first under TRIPS flexibilities.

TRIPS flexibilities, therefore, allow countries to override global IP rules to mitigate the damage caused by an emergency and have been mainly applied where pharmaceuticals have been concerned. 

In July, South Africa issued a communication titled “Beyond Access to Medicines and Medical Technologies Towards a More Holistic Approach to TRIPS Flexibilities.”  It was pointed out that the COVID-19 response required looking beyond patents towards a more “integrated approach to TRIPS flexibilities that include other various types of intellectual property (IP) rights including copyrights, industrial designs and trade secrets” (IP/C/W/666). As such, the recommendations submitted by South Africa are cross-field as they also touch upon the production and distribution of essential medical devices such as masks, ventilators, personal protective equipment.

Though proposed out of the noble motives, South African communication is ignorant of the need to protect IP rights instead of eroding them. Opponents of intellectual property rights often make the mistake of taking innovation for granted thereby turning a blind eye to the driving force of every kind of entrepreneurship: economic incentives. Patents and various other forms of intellectual property are not biased towards the inventor. On the contrary, they ensure that companies can continue to innovate and deliver on their products to consumers. 

The short-term result of eroding intellectual property rights would be increased access to innovations, but in the long-term, there would be no innovation. With the second wave of coronavirus on the way putting brakes on the economic recovery, it is not something we can afford.

In fact, we need to stay as firm as ever in our defence of intellectual property rights if we want to defeat coronavirus and many more diseases. Patients who may one day be diagnosed with incurable diseases such as Alzheimer’s, Cystic Fibrosis, Diabetes, or HIV/AIDS should benefit from the chance that a cure will become available, and protecting IP is the only way to give them that chance. If we act boldly now and weaken intellectual property rights even further – and expand the scope of TRIPS flexibilities – we will cause the damage that will be hardly reversible, and the post-pandemic world will have to foot the bill.

As the former Czech Prime Minister, Jan Fischer pointed out, “Patents and other intellectual property protections enshrine the incentives that compel drug companies to take such extraordinary risks. By temporarily barring copycat products, the rules give innovators an opportunity to try and recoup their huge development costs. A substantial portion of the revenues achieved from the sale of those innovative drugs are dedicated to fund new projects, and enable the pursuit of path-breaking R&D in the first place.”

If we want more prosperity for all, we need to protect intellectual property rights. TRIPS flexibilities, and the call to extend their scope beyond patens, in particular, are an attempt to erode IP, and should be seen for what they really are: a threat to our economic recovery from COVID-19 and future innovation.

By Maria Chaplia, European Affairs Associate at the Consumer Choice Center

David Clement and Yael Ossowski: Pa. can and should legalize cannabis, but do it right

State should ensure that taxation and regulation of products are reasonable and fair.

If the General Assembly takes up Gov. Tom Wolf’s call, Pennsylvania could become the 12th state to legalize recreational cannabis. They should absolutely follow through. But it won’t end there.

Legalizing cannabis is a no-brainer. Any negatives from legalization pale in comparison with the costs of prohibition. The failed war on drugs has criminalized otherwise peaceful citizens, torn minority communities apart and locked up far too many of our friends, family and neighbors. We know the cost.

But legalization in itself isn’t virtuous. State legislators must ensure that legislation does not end up causing even more problems. We need only look at other states, as well as our friendly neighbor to the north, to understand why smart cannabis legalization is necessary.

To begin, it has been suggested that Pennsylvania use its model of state retail of alcohol — namely through the Pennsylvania Liquor Control Board — as a template for selling cannabis products. Though Harrisburg legislators are tempted, this would be an outright disaster.

The state should lean on the private sector and avoid treating cannabis like alcohol. It is well known that Pennsylvania’s alcohol retail market is one of the most archaic and anti-consumer markets in the country, one that artificially raises prices, causes massive inconvenience and pushes thousands of Pennsylvanians to buy alcohol out-of-state. We especially saw this during the pandemic. That’s hardly an example to emulate.

In states where it is legal, cannabis retail is offered by licensed private businesses rather than state monopolies. Ontario, Canada’s most populous province, now has only private retail storefronts and is proceeding to have a retail market where licenses are uncapped. That means there can be better competition, a more responsive market and better customer service than in a state store.

A licensed private retail market would be wise for Pennsylvanians, as it would allow the market to determine the number of stores available to consumers, rather than a bureaucracy in Harrisburg.

The legal market would be dynamic enough to respond to consumer demand, an important factor in prying consumers away from the illegal market. Stopping the black market would help raise the tax revenue Mr. Wolf intends to offer to minority communities and small businesses in need of assistance post-COVID-19.

Added to that, Pennsylvania should ensure that taxation and regulation of cannabis products are reasonable and fair.

Though Colorado and Washington have raised an impressive amount of revenue since legalization, California — with higher-than-average taxation, counties that don’t allow legal shops, and a myriad of red tape governing who can grow and sell — has one of the largest cannabis black markets in the country. Nearly 80% of cannabis consumed in the state remains in the illegal market, depriving the state treasury of much-needed revenue, but also locking out entrepreneurs who could otherwise operate successful dispensaries and contribute to their communities.

Another issue is which products will be legal to sell and use.

Canada, the largest industrialized country to legalize cannabis, mandated that only dried cannabis and oils be made legal on day one. That meant harm-reducing alternatives, such as beverages or edibles, were not available for sale until the next year. Giving the green light on product variety would benefit consumers and the retailers who are permitted to sell legal products, and would help the legal market compete against illegal alternatives.

If the General Assembly acts, there will be a lot of temptation to treat cannabis as nothing more than a cash crop for government coffers. But if legislators want to help benefit the minority communities who have been hurt by prohibition, future consumers and prospects for raising enough revenue to ease the pain caused by the pandemic, they would be wise to enact a smart cannabis policy.

David Clement and Yael Ossowski are North American affairs manager and deputy director, respectively, at the Consumer Choice Center, a global consumer advocacy group.

Originally published here.

Let legal pot shops deliver, critics say, as Ontario Cannabis Store brings express service to London

Ontario’s marijuana wholesaler is expanding its expedited delivery service to London, the only city in Southwestern Ontario where the new service is available.

But critics of the Ontario government’s cannabis delivery monopoly are questioning why pot shops aren’t allowed to offer the same service.

Ontario Cannabis Store (OCS), the government-run pot wholesaler and delivery service, has rolled out its express delivery service to seven more cities across the province. Orders placed will be delivered within three days at no cost.

“OCS is pleased to continue increasing access to legal cannabis for Ontario adults and making it easy for consumers to choose legal,” spokesperson Joanna Hui said in an email.

OCS is the only legal option for cannabis delivery in the province, but it has drawn fire for being too slow and expensive.

Ontario briefly let cannabis retail stores offer delivery and curbside pickup — a move the industry had long demanded — in April amid the COVID-19 pandemic.

But the temporary emergency order was lifted in July, despite protests from many of the brick-and-mortar stores, which argued the services let them compete with the black market.

The Friendly Stranger at 1135 Richmond St. was the only London pot shop to offer both delivery and curbside pickup.

Company president James Jesty said the government wants to maintain a monopoly on pot delivery in Ontario.

“I fully think that we should be able to do delivery,” said Jesty, whose company struck a partnership deal to open the store near Western University’s gates. “We’re still in COVID, we’re still being asked to stay home.”

Money was spent hiring drivers and renting vehicles to set up the Friendly Stranger’s delivery service, which was free for orders over $50, he said. “When they took it away from us, it really didn’t make a lot of sense.”

David Clement, North American affairs manager for the Consumer Choice Centre, said only letting OCS deliver pot products hurts consumers by leaving them with no other options.

“COVID-19 has really rallied people to support local businesses,” said Clement, whose centre has lobbied provinces to let retailers offer same-day delivery. “That same concept would apply to cannabis retail.”

OCS offers same-day delivery in more than a dozen cities, mostly in the Greater Toronto Area.

Last month, the Alcohol and Gaming Commission of Ontario (AGCO), the province’s marijuana regulator, pledged to increase the pace of pot shop approvals from 20 to 40 a month, starting this fall.

In London, where seven marijuana retailers now operate, another 15 are in the final approval stage.

Originally published here.

Charlotte Can Create Affordable Housing With ‘YIMBY’ Movement

For those of us who’ve grown up around the Queen City, she’s only gotten more beautiful with age. The Southern capital of banking has become a premier hub for technology, energy and finance, complete with the fifth-highest major city population boom in the country. That’s led to a more diverse and inclusive economy, but also higher costs of living that make life difficult for many residents.

 A recent UNC-Charlotte Urban Institute report found that 44% of Charlotte renters are cost-burdened, meaning they spend more than a third of their income on housing. That, combined with a history of redlining and discrimination in minority neighborhoods, means we need significant change for a more just and affordable city.

To accommodate growth and address the historical and economic injustices facing minority communities, Charlotte will need to be bold. YIMBY bold.

 YIMBY – “Yes In My Backyard” – is a social movement that unites progressives on the left and free-market libertarians on the right. It advocates pro-development and pro-density policies, and sees a lack of housing supply as a major cause of unaffordable rents, as well as zoning laws that restrict growth.

If Charlotte wants to attract companies scouting for new headquarters while providing low-cost housing to its rising middle class, it will need YIMBY policies. That means fast-tracking building permits, repurposing zoning for mixed-use, and removing single-family house zoning, which makes up 84% of Charlotte’s residential neighborhoods. We would have more duplexes and triplexes, walkable communities and businesses, and homes for the next generation of residents.

Last year, Gov. Cooper signed SB316, mandating North Carolina’s major cities better track affordable housing units and zoning reforms. At the federal level, a bipartisan group of senators introduced the YIMBY Act to push localities to eliminate discriminatory land-use policies.

Despite the efforts, opposition remains.

Too often, YIMBY policies are thwarted by an unholy alliance of affluent suburbanites who want construction far from them, and well-intentioned social activists who champion government-subsidized “affordable housing” at the expense of private development. Both divergent causes make up a unique NIMBY (Not In My Backyard) coalition, opposing market-based growth but for different reasons.

Last year, it was the Beatties Ford Road townhome project, opposed by activists and city councilors who complained of increased traffic and an unwanted “facelift” to the then-empty lot. Before that, it was the Keyo Park West tiny home development, opposed by city planners. Plans to clarify regulations were shelved, and the project died amid lawsuits, putting tiny homes in a gray zone.

In Charlotte politics, the debate on housing centers on various schemes to subsidize affordable homes, rather than endorsing more construction.

In July, the city council explored adopting development impact fees to raise funds for infrastructure and transit. While attractive to revenue-deprived city planners, these fees are an effective tax on new homes, meaning higher home prices that would put them above-market for too many. That discourages new housing when we need it the most. There are better solutions. Charlotte planning director Taiwo Jaiyeoba wants to eliminate single-family zoning, and that’s a good first step.

Next, our leaders could overhaul zoning regulations to blend residential and commercial properties, what we call upzoning. That would avoid piecemeal zoning petitions that slow the process+ and would spur new communities that combine affordable living with jobs and economic opportunities. They could also remove parking requirements that often hamstring dense apartments.

Rather than centrally planning the next affordable housing project or raising fees on new homes, city leaders should encourage private developers to increase supply at more affordable prices. That would offer people of all income levels a place to live.

By injecting a dose of YIMBY, the Queen City would achieve its destiny as a great American city.

Yaël Ossowski is a Charlotte-area native and deputy director at the Consumer Choice Center.

Nous n’avons pas besoin de plus d’impôts pour réagir à la crise du COVID-19

La crise du COVID-19 continue et les fonds anti-crise se gonflent. Afin de proposer une relance directe, quelques pays européens prennent la décision raisonnable de réduire les charges fiscales, tandis que d’autres veulent les augmenter. Il est évident qu’une fiscalité simplifiée et réduite donnerait le boost nécessaire aux consommateurs et aux entreprises. Comment convaincre les décideurs de changer de route?

Il n’y a rien d’incroyable à déclarer que la crise sanitaire du COVID-19 a permis à beaucoup de bords politiques d’imposer des propositions politiques qui nécessitent une crise pour convaincre l’opinion public. Inimaginable il y a un an, le Conseil européen a accepté de faire un emprunt européen  et de lever des taxes européennes. Nous voilà en début d’automne avec un débat politique bien changé et une discussion de solidarité qui nous rappelle la crise de 2008.

En plein milieu de la dernière crise financière, les décideurs politiques demandaient aux citoyens de faire un effort. Taxe de crise spéciale, augmentation de l’impôt sur le revenu, taxe retenue à la source (qui a frappé de façon inéquitable les différents épargnants), puis augmentation de la TVA en 2014 de 15 à 17%. En même temps, l’endettement de l’Etat central est restée bien en-dessus des 20% du PIB (qui représente plus que le double de la celle du début du siècle). Il s’avère que l’augmentation des moyens de l’Etat central ne s’est pas fait en coordination avec une rigueur budgétaire accrue. On a pu observer ce phénomène depuis les années 2000 jusqu’à aujourd’hui.

L’Allemagne a au contraire décidé d’une réduction temporaire de la TVA jusqu’au 1er janvier, de 19 à 15%, respectivement de 7 à 5% pour le taux réduit. Depuis ce mois-ci, les consommateurs irlandais bénéficient d’une réduction de la TVA de 23 à 21%. Sachant  que la taxe sur la valeur ajoutée est la taxe la plus injuste pour les consommateurs, pourquoi ne pas mettre en place une pareille mesure au Luxembourg ?

l convient également de comprendre deux leçons économiques importants. Premièrement, d’après les travaux de  Laffer, nous savons qu’une réduction d’impôts ne coïncide pas forcément avec une réduction des recettes. Deuxièmement, il est important de savoir que des réduction d’impôts sans des réductions de dépenses n’auront que peu d’effets.. 

Il convient de rappeler que l’Etat en tant que tel n’est pas une entité génératrice de richesse. Pour financer ses activités, il doit puiser des ressources dans le secteur privé. Ce faisant, il affaiblit le processus de création de richesses et compromet les perspectives de croissance économique réelle.

Comme l’Etat n’est pas une entité génératrice de richesse, toute réduction d’impôts alors que les dépenses publiques continuent d’augmenter ne va pas soutenir une véritable croissance économique. Or, la relance budgétaire pourrait “fonctionner” si le flux d’épargne réelle est suffisamment important pour soutenir, c’est-à-dire financer, les activités de l’Etat tout en permettant un taux de croissance des activités du secteur privé. Si la baisse des impôts s’accompagne d’une diminution des dépenses publiques, les citoyens auront plus de moyens de réactiver la création de richesse. Ainsi nous aurons une véritable reprise économique. 

Cette logique s’applique à la réduction des impôts des entreprises, qui surtout en temps de crise, n’est pas une mesure populaire. Pourtant, ceux qui attaquent une telle réduction se trompent. Ils s’appuient sur une vision à somme nulle du monde dans laquelle les gains des uns sont considérés comme un préjudice pour les autres. Ils supposent que les propriétaires de sociétés profitent de la quasi-totalité des avantages des réductions d’impôts sur les sociétés. Ils s’appuient sur des données très faussées pour étayer leurs arguments ainsi qu’une mauvaise compréhension du fonctionnement de l’économie.

La vision à somme nulle ignore le fait que les accords volontaires de marché profitent à tous les participants. Par conséquent, l’augmentation des échanges commerciaux mutuellement bénéfiques, tout comme la réduction de la fiscalité, profite à la fois aux acheteurs et aux vendeurs. En revanche, punir les vendeurs par des taxes plus élevées les incite également à faire moins avec leurs ressources au service qu’ils rendent aux autres.

La réduction de l’impôt sur les sociétés permet d’améliorer  les techniques de production, la technologie et le montant des investissements en capital, ce qui accroît la productivité et les revenus des travailleurs. Cette réduction augmente les incitatifs à la prise de risque et à l’esprit d’entreprise au service des consommateurs. Cela réduit les importantes distorsions causées par l’impôt, et ces changements profitent aux  travailleurs et aux consommateurs.

Les plans de recouvrement centralisées montreront très peu de résultats, car l’Etat, dans sa structure centralisée, est incapable de savoir ce que les gens veulent réellement. Si nous voulons combattre les effets des fermetures liées au COVID-19, il faut libérer les capacités entrepreneuriales des citoyens, et réduire les obstacles réglementaires auquels les entreprises font face.

Consumer Choice Center Signs Joint Letter to Senate Judiciary Committee on Antitrust Hearings

September 15, 2020
The full letter can be downloaded here

The Honorable Michael S. Lee
Chairman, Senate Committee on the Judiciary
Subcommittee on Antitrust, Competition Policy and Consumer Rights

The Honorable Amy Klobuchar
Ranking Member, Senate Committee on the Judiciary
Subcommittee on Antitrust, Competition Policy and Consumer Rights

Dear Chairman Lee and Ranking Member Klobuchar,

We, the undersigned, write today to provide you with a statement for inclusion in the record of the Subcommittee’s September 15th hearing, “Stacking the Tech: Has Google Harmed Competition in Online Advertising?”[1] We are a group of legal experts, economists, and consumer and taxpayer advocates who believe in the importance of promoting competitive markets and defending the rule of law.

We believe that weaponizing antitrust for broader socio-economic purposes would fundamentally alter the primary goal of antitrust and seek to address the increasing calls to move away from the consumer welfare standard[2] and to use antitrust as a tool for unrelated concerns.[3] While signatories herein may prefer various approaches for addressing non-competition concerns about issues such as privacy, online content, liability, and myriad other popular topics associated with technology firms, we uniformly agree that any congressional assessment of issues related to digital markets must be characterized by rigorous economic analysis, productive in promoting competition and consumer welfare, and based on predictable and enforceable standards.

As discussions about antitrust law enter mainstream discourse, we thank the Subcommittee for the opportunity to provide a statement for inclusion in the record, and for providing an appropriate forum specifically dedicated to the discussion of antitrust concerns.

PUTTING RECENT PROPOSALS INTO PERSPECTIVE

Before addressing the specific topic of today’s hearing, we find it critical to make note of the economic consequences of many of the recent proposals to revise antitrust law, which seriously risk making the American economy and consumers substantially worse off across a wide array of industries. Many discussions around antitrust have centered on large, successful American technology companies, and the House Judiciary Committee has launched an investigation and we expect to see certain proposals come out of that investigation. However, the implications of today’s antitrust debate extend far beyond just “Big Tech.”

These proposals — which are likely to materialize within the days or weeks following today’s hearing —include aggressive merger prohibitions, inverting the burden of proof, allowing collusion and antitrust exemptions for politically favored firms, and politicizing antitrust enforcement decision-making more generally. Additionally, arbitrary or overly broad antitrust enforcement would hamper economic recovery and risks job losses as the nation recovers from the economic slow-down, evolving market dynamics, and changing consumer needs resulting from the global pandemic.

I.            The Current State of the Antitrust Debate

We fear that both sides of the aisle are pushing for the weaponization of antitrust, either as a tool to punish corporate actors with whom they disagree or out of a presupposition that big is bad. Unfortunately, the antitrust debate has begun to devolve into a litany of unrelated and often contradictory concerns, unsubstantiated and dismissive attacks, and seemingly a presumption that any market-related complaint that can be made on the internet can also be cured by the panacea of antitrust. This highly charged atmosphere has led to radical proposals that run contrary to economic evidence and endanger significant advances made in antitrust scholarship.

The Senate Committee on the Judiciary — and specifically this Subcommittee — has an important role to play. While there are many issues plaguing our society today, we believe that this Committee is equipped to examine antitrust soberly and without misdirection from legitimate anger over other issues which antitrust is not designed to address.

CONSIDERATIONS FOR FURTHER INQUIRY

II.            The Law: New Technology, Same Principles  

a.      The consumer welfare standard has greatly benefited antitrust and is underrecognized as a significant narrowing of federal government power in the last half century and a major victory for the movement to preserve the rule of law.

It is important to consider what is at stake. Using antitrust to achieve policy or political goals would upend more than a century of legal and economic learning and progress. The need to bring coherency to antitrust law through a neutral underlying principle that cannot be weaponized is what led to the adoption of the modern consumer welfare standard. It is broad enough to incorporate a wide variety of evidence and shifting economic circumstances but also clear and objective enough to prevent being subjected to the beliefs of courts and enforcers.[4]

Therefore, we would like to stress the need to distinguish between the proper and improper uses of antitrust in approaching discussions of market power, and are concerned that today’s hearing could lead to the use of antitrust to address concerns surrounding online content moderation, data privacy, equality, or other socio-political issues that are unrelated to the competitive process. Weaponizing antitrust for broader socioeconomic purposes would fundamentally alter the primary goal of antitrust, undermine the rule of law, and negatively impact consumers.

I.            The Role of Presumptions

b.      Approaches to antitrust enforcement based on presumptions of anticompetitive harm drastically upend core tenants of our legal system by inverting the burden of proof and diminishing the role of the federal judiciary.

Returning to the highly interventionist pre-1970s antitrust jurisprudence through burden shifting provisions that would require a company to prove it is not a monopoly would create greater incentives for the government and private plaintiffs to file suit. More importantly, however, these reforms are not needed because current antitrust law has adequate power to intervene and claims of lax antitrust enforcement are demonstrably false. The FTC and the DOJ have only lost a handful of cases in the last decade, and private litigants continue to bring monopolization claims. Outside of the courtroom, multitudes of mergers and anticompetitive actions are prevented out of fear of government action.

II.            The Market: Questions of Concentration and Definitions

c.       Digital platform markets are not traditional linear markets. They are two-sided markets and competition typically turns on non-price factors.

One of the most important questions to address in this discussion is that of market definition. Importantly, digital advertising is not a traditional, linear market. It is a two-sided market in which advertisers try to influence the online behavior of consumers through an intermediary.[5] Traditionally, market definition is framed around a static product with a distinct type of customer. With advances in technology, this build-and-freeze model breaks down as advertising platforms evolve.

However, as Ronald Coase pointed out: [I]f an economist finds something – a business practice of one sort or other – that he does not understand, he looks for a monopoly explanation. And as in this field we are rather ignorant, the number of ununderstandable practices tends to be rather large, and the reliance on monopoly explanations frequent.[6] Indeed, when it comes to the innovative business model that has engulfed digital advertising, regulators are struggling to apply the correct regulatory framework.

d.      The relationship between concentration and competition in the market is tenuous, and structural changes in the economy have resulted from increased competition.

A positive correlation between high market concentration and profitability does not indicate monopolistic practices, and the underlying drive for commercial success can simultaneously enhance pro-consumer efficiencies.[7] In other words, concentration alone does not indicate lack of competition, as firms capture a larger slice of the market through higher productivity and innovation.[8] Some critics argue that systematic anticompetitive conduct is inherent in the digital advertising model, or that the rapid growth or dominance of these platforms allow them to exist entirely insulated from competitive market forces.

As then-Judge Clarence Thomas wrote in U.S. v. Baker Hughes, “[e]vidence of market concentration simply provides a convenient starting point for a broader inquiry into future competitiveness.”[9]It is a step in the right direction to for today’s hearing to analyze the exercise of market power, but it is critical to determine whether the power of the market is being used to benefit or harm not the competitor, but instead the consumer. That is the relevant inquiry.

CONCLUSION

As Robert Bork pointed out, “[a]dvertising and promotion are particular obsessions of antitrust zealots.”[10]

We encourage the Committee to continue in this effort and to reclaim this debate from the politicized approach that seeks to transform our antitrust laws and refocus the conversation on enforcement, market analysis, and the core purpose of antitrust.

We thank you for your oversight of this important issue and ask that this letter be included on the Committee or Subcommittee’s website and repository. Please feel free to contact us should you have any questions or requests for additional input from signatories. We welcome the opportunity to further discuss these views and relevant proposals or congressional assessment with the Committee.

Sincerely,


[1] See Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google. Hearing Before the House Committee on the Judiciary, Subcommittee on Antitrust, Commercial, and Administrative Law, 116th Cong, (July 29, 2020), available at: https://judiciary.house.gov/calendar/eventsingle.aspx?EventID=3113

[2] See Robert H. Bork, “The Antitrust Paradox: A Policy At War With Itself” (1978).

[3] See, e.g. Douglas H. Ginsburg, Originalism and Economic Analysis: Two Case Studies of Consistency and Coherence in Supreme Court Decision Making, 33 Harvard Journal of Law and Public Policy. (217–18) (2010) (discusses political goals read into the Sherman Act by the Supreme Court).

[4] Shifting away from the consumer welfare standard would catapult antitrust law back to the era of the 1960s when, in Justice Potter Stewart’s words, “[t]he sole consistency that I can find is that, in litigation under [the antitrust laws], the Government always wins.” United States v. Von’s Grocery Co., 384 U.S. 270, 301 (1966) (Stewart, J., dissenting).

[5] See, e.g. Ashley Baker, Comments Submitted to the DOJ Antitrust Division Regarding Competition in Television and Digital Advertising. (June 2019), available at: http://bit.ly/2PwehnJ.  

[6] Coase, R.H. “Industrial Organization: A Proposal for Research. Policy Issues and Research Opportunities in Industrial Organization.” (p. 67). (Victor R. Fuchs ed.) (1972).

[7] Harold Demsetz, Industry Structure, Market Rivalry, and Public Policy, 16 Journal of Law & Economics

(April 1973), 1-8.

[8] See David Autor, David Dorn, Lawrence F. Katz, Christina Patterson, and John Van Reenen. “Concentrating on the Fall of the Labor Share.” American Economic Review, 107 (5): 180-85 (2017).

[9] See U.S. v. Baker Hughes

[10] See Robert H. Bork, “The Antitrust Paradox: A Policy At War With Itself” (p. 314) (1978).
Organizations listed for identification purposes only.


Sincerely,
Ashley Baker
Director of Public Policy
The Committee for Justice


Robert H. Bork, Jr.
President
The Bork Foundation


Wayne Brough
President
Innovation Defense Foundation


James Czerniawski
Tech and Innovation Policy Analyst
Libertas Institute


Richard A. Epstein
The Laurence A. Tisch Professor of Law,
New York University School of Law
The Peter and Kirsten Bedford Senior
Fellow, The Hoover Institution
The James Parker Hall Distinguished
Service Professor of Law Emeritus and
Senior Lecturer, The University of Chicago


Tom Giovanetti
President
Institute for Policy Innovation


Katie McAuliffe
Executive Director
Digital Liberty


Doug McCullough
Director
Lone Star Policy Institute


Grover G. Norquist
President
Americans for Tax Reform


Curt Levey
President
The Committee for Justice


Yaël Ossowski
Deputy Director
Consumer Choice Center


Eric Peterson
Director of Policy
Pelican Institute


Thomas A. Schatz
President
Council for Citizens Against Government
Waste


Timothy Sandefur
Vice President for Litigation
Goldwater Institute


Pete Sepp
President
National Taxpayers Union


David Williams
President
Taxpayers Protection Alliance


Josh Withrow
Senior Policy Analyst
FreedomWorks

Scroll to top