The Red Folder

Archived from March 4, 2024

Key stories for the week, brought to you by the distinguished newsman Sasha Morel.

Reading for the sake of reading sucks. Telling yourself to read to win a round is nice but ineffective. This condensed news brief helps you understand current domestic and international issues, analyze the news, and gives you opportunities to read more.

Domestic Stories

3 key domestic stories for the week:

1) The Supreme Court’s Social Media Surprise Sasha Morel

The U.S. Supreme Court was scheduled to deliberate on Monday about the legality of laws in Florida and Texas, both endorsed by Republicans, that impose restrictions on social media platforms' ability to regulate objectionable content. This pivotal legal discussion involves two cases that may significantly reshape free speech rights in the digital era.

The primary question revolves around whether the 2021 state laws, designed to regulate content moderation by major social media platforms, infringe upon the First Amendment's free speech protections for these companies. The lower courts have taken different stances on this matter, with certain provisions of Florida's law being blocked, while the Texas measure has been upheld.

Noteworthy tech industry trade groups, including NetChoice and the Computer & Communications Industry Association (CCIA), which represent members such as Meta Platforms (Facebook's parent company), Google (Alphabet's subsidiary), YouTube, TikTok, and Snap (owner of Snapchat), have challenged these laws. However, due to ongoing litigation, neither law has been implemented.

The central question before the justices is whether the First Amendment safeguards the editorial discretion of social media platforms, preventing governments from compelling companies to publish content against their preferences. The companies argue that without such discretion, their platforms would be inundated with spam, bullying, extremism, and hate speech.

Another aspect under consideration is whether the state laws unduly burden the free speech rights of social media companies by mandating individualized explanations for certain content moderation decisions. This includes the removal of posts from their platforms. President Joe Biden's administration opposes these laws, contending that the content moderation restrictions violate the First Amendment by forcing platforms to present objectionable content.

Florida Governor Ron DeSantis, upon signing the law in 2021, emphasized the need to hold Big Tech accountable for inconsistent censorship. Florida's law requires large platforms to host certain speech, prohibiting the censorship or banning of political candidates or journalistic enterprises.

Similarly, Texas Governor Greg Abbott, signing the law in 2021, condemned what he perceived as a movement by some social media companies to silence conservative ideas. The Texas law restricts social media companies with at least 50 million monthly active users from censoring users based on viewpoint and allows users or the Texas attorney general to sue for enforcement.

Florida seeks to revive its law after a ruling against it by the 11th U.S. Circuit Court of Appeals, while the industry groups are appealing a decision by the 5th U.S. Circuit Court of Appeals, which upheld the Texas law. The Supreme Court had previously blocked the Texas law at an earlier stage, with Justice Elena Kagan and three conservative justices dissenting.

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2) FTC’s Kroger Conundrum Sasha Morel

The Federal Trade Commission (FTC) has brought an end to the lengthy review process of the $24.6 billion Kroger-Albertsons merger, asserting that it fails to protect consumers from rising prices, ensure worker safeguards, and maintain competitiveness for the offloaded stores. The harshest criticism is reserved for the divestiture plan to C&S Wholesale Grocers, with doubts raised about C&S's ability to create a viable business from the divested assets. Despite the setback, Kroger intends to challenge the FTC in court, extending the process further.

The deal between Kroger and Albertsons was originally approved, because if the merger went down then the companies would have more leverage over purchase prices for goods. Theoretically, that should allow companies to lower consumer prices. Yet, the FTC challenged this notion. As noted in the WSJ’s podcast, merging lowers competition. Which as they continue to explain, could allow Kroger to reduce wages, increase prices, and undercut suppliers like farmers.

The FTC's opposition aligns with a pattern of regulatory challenges to major mergers under the Biden administration. Regulatory agencies, particularly under FTC chairwoman Lina Khan, focus on the impacts of mergers on consumers, workers, and local markets. The widespread opposition from lawmakers, labor unions, and consumer groups signaled the challenging road ahead for the supermarket chains.

The choice of C&S Wholesale Grocers as the inheritor of over 400 divested stores faced scrutiny, as the FTC questioned C&S's retail experience and operational capabilities. The proposed divestitures were criticized for creating a disorganized mix that would struggle to compete with the merged Kroger-Albertsons entity. The geographical spread of stores across 17 states also raised concerns about effective management.

The FTC's emphasis on a narrow definition of grocery competition, focusing on the impact within the supermarket channel, contrasts with industry dynamics where competitors like Walmart, Amazon, and discount grocers play significant roles. Kroger and Albertsons contest the outdated reasoning, highlighting the changing landscape where non-supermarket retail offerings gain market share.

While Kroger and Albertsons face a setback in the regulatory process, the deal is not entirely buried. The companies plan to counter the FTC's claims in court, challenging assertions about higher prices and adverse effects on workers. The likelihood of success in court is uncertain, considering the FTC's recent poor track record in litigating merger challenges, although industry observers should be cautious, considering the successful challenge to JetBlue's acquisition attempt earlier this year.

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3) Trump 1, Colorado 0 Sasha Morel

On March 4, the U.S. Supreme Court delivered a significant victory to Donald Trump, preventing states from disqualifying federal office candidates under a constitutional provision related to insurrection. The decision overturned Colorado's exclusion of Trump from its Republican primary ballot, where he faced disqualification due to the 14th Amendment of the U.S. Constitution. The Colorado court had asserted that Trump's alleged involvement in the January 6, 2021, Capitol attack disqualified him from seeking public office again.

In a unanimous ruling, the Supreme Court justices declared that only Congress possesses the authority to enforce the constitutional provision against federal officeholders and candidates. However, four justices, including the three liberal members, criticized the majority for setting rules on how the provision could be enforced in the future.

As the frontrunner for the Republican nomination to challenge President Joe Biden in the upcoming election, Trump expressed satisfaction with the decision during an appearance in Florida. He emphasized that candidates should not be removed from a race based on opponents' preferences. Trump's sole remaining rival for the Republican nomination is former South Carolina Governor Nikki Haley.

The ruling, issued on the eve of Super Tuesday, marked a swift resolution compared to the ongoing consideration of Trump's claim of immunity from prosecution related to his attempts to overturn the 2020 election. The Supreme Court's conservative majority, including three Trump appointees, acted promptly in addressing the ballot disqualification issue, potentially benefiting Trump by avoiding delays in his criminal trial.

The 14th Amendment's Section 3, prohibiting individuals engaged in insurrection from holding office, was central to the case. The Supreme Court clarified that states could disqualify candidates for state office but lacked the constitutional authority to do so for federal offices, particularly the presidency.

While Trump welcomed the ruling, critics, including Colorado Secretary of State Jena Griswold, expressed disappointment, asserting that states should have the authority to enforce the disqualification clause.

Despite the unanimous agreement on the outcome, liberal justices and Justice Amy Coney Barrett raised concerns about the majority's decision to limit how Section 3 could be enforced in the future. Barrett urged a focus on unity, emphasizing the unanimity of the justices on the case's outcome.

Trump's eligibility was challenged by a group of voters in Colorado, backed by the watchdog group Citizens for Responsibility and Ethics in Washington. The Supreme Court's decision allows Trump back on the ballot but does not directly address the Colorado court's finding that he engaged in insurrection.

With lawsuits seeking to disqualify Trump appearing across the country, the Supreme Court's role in this case, reminiscent of the Bush v. Gore decision in 2000, is pivotal in shaping the trajectory of the presidential race. The court's differing timelines in addressing the immunity and ballot issues have sparked discussions about the impact on Trump's candidacy in all 50 states.

The ruling comes in the aftermath of the Capitol attack on January 6, 2021, where Trump supporters sought to prevent the certification of Biden's election victory. The court's decision reflects on the broader context of political violence and Trump's role in the events leading up to the insurrection.