Tech's core regulatory proposition is "it's not a crime if we do it with an app." It's not an unlicensed taxi if we do it with an app. It's not an illegal hotel room if we do it with an app. It's not an unregistered security if we do it with an app. It's not wage theft if we do it with an app.
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If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2025/01/25/potatotrac/#carbo-loading
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Inflation is one of the most politically salient factors of this decade, and so much of inflation can be attributed to a crime, done with an app, with impunity for the criminals. The entire food supply has been sewn up by cartels of 2-5 giant companies, and they colluded to raise prices, and bragged about it, and got away with it, because neoclassical economists insist that it's impossible for this kind of price fixing to occur in an "efficient market."
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Some of these cartels are well-known, like the Coke/Pepsi duopoly. Pepsi's bosses boasted to their shareholders about "Pepsi pricing power," and how they were able to raise prices over the inflationary increases caused by covid and the Russian invasion of Ukraine:
https://pluralistic.net/2023/03/11/price-over-volume/#pepsi-pricing-power
You might know that pretty much every packaged good in your grocery store is made by one of two companies, Unilever and Procter and Gamble.
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Both CEOs boasted to their investors about their above-inflation price increases:
https://pluralistic.net/2021/11/20/quiet-part-out-loud/#profiteering
But other cartels are harder to spot. It may seem like your grocer's eggs department is filled with many different companies' products. In reality, a single company, Cal-Maine Foods, owns practically every brand of eggs in the case: Farmhouse Eggs, Sunups, Sunny Meadow, Egg-Land’s Best and Land O’ Lakes.
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They made record profits after the pandemic and through bird flu, a fact that CFO Max Bowman attributed to "significantly higher selling prices" and "our ability to adapt to inflationary market pressures":
https://pluralistic.net/2023/01/23/cant-make-an-omelet/#keep-calm-and-crack-on
But Cal-Maine is comparatively transparent. The other food cartels - especially those that serve the restaurant sector - are harder to spot.
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In The Lever, Katya Schwenk describes how four companies - Lamb Weston, JR Simplot, McCain Foods and Cavendish Farms - have captured the frozen potato market and all that comes with it (fries, tater tots, etc):
https://www.levernews.com/the-rise-of-big-potato/
These companies have been hiking prices for years, but really started to turn the screws during the post-covid inflationary period.
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One of Schwenk's sources is Josh Saltzman, owner of the DC sports bar Ivy and Coney. Ten years ago, Saltzman charged $3 for fries; now it's $6 - and Saltzman's margins have declined. Saltzman has a limited number of suppliers, and they all get their potatoes from Big Potato, and they bundle those potato orders with their other supplies, making it effectively impossible for Saltzman to buy his potatoes from anyone else.
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Big Potato controls 97% of the frozen potato market, and any sector that large and concentrated is going to be pretty cozy. The execs at these companies all meet at industry associations, lobbying bodies, and as they job-hop between companies in the cartel. But they don't have to rely on personal connections to rig the price of potatoes: they do it through a third-party data-broker called Potatotrac.
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Each cartel member sends commercially sensitive data - supply costs, pricing, sales figures - to Potatotrac, and then Potatotrac uses that data to give "advice" to the cartel members about "optimal pricing."
This is just price-fixing, with an app. The fact that they don't sit around a table and openly discuss pricing doesn't make this price-fixing. What's more, they admit it. A director at McCain said that "higher ups" forbade anyone in the company from competing on price.
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A Lamb Weston exec described the arrangement as everyone "behaving themselves," chortling that they'd "never seen margins this high in the history of the potato industry." Lamb Weston's CEO attributed a 111% increase in net income to "pricing actions."
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Lamb Weston's execs understand that they're driving small restaurants out of business, and that the real beneficiaries are big chains that can pass the price increases onto their customers, like "Chili’s and the Texas Roadhouses and Cheesecake Factory":
https://app.tegus.co/guest/document/view/67Hf3DiMGQ944SkfpRhLfNeiqekjA67sm2dxTCYtjoggUaJXk2chDg9wxMnZ
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This is by no means unique to the potato industry. A data-broker called Agri Stats works with America's largest meat-packers to rig the price of meat - packers send Agri Stats the same kind of data that Big Potato sends to Potatotrac, and Agri Stats sends back the same "recommendations" that allow them to raise meat prices across the board, in lockstep:
https://pluralistic.net/2023/10/04/dont-let-your-meat-loaf/#meaty-beaty-big-and-bouncy
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Lots of food categories are as inbred as meat and potatoes: "four firms controlled nearly 80 percent of the almond milk market, for instance. Three companies controlled 83 percent of the canned tuna market, and four companies controlled more than 86 percent of the microwave popcorn market."
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The "price fixing is legal if we do it with an app" gambit is not just about food, either. Apps like Realpage let big corporate landlords - who've bought up a sizable fraction of all the available homes in America - collude to raise rents:
https://pluralistic.net/2024/02/27/ai-conspiracies/#epistemological-collapse
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And private equity companies have rolled up all the fire truck companies, hiking the price of trucks, creating backlogs and bottlenecks for parts and service, and starving the nation's municipalities (including Los Angeles) of fire-fighting equipment:
https://www.thebignewsletter.com/p/did-a-private-equity-fire-truck-roll
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This kind of price-fixing was central to the enforcement actions of the Biden administration's trustbusters at the FTC, and their investigations and actions inspired state AGs and private parties to bring their own antitrust suits. The question is, will Trump's enforcers continue this agenda? And will Trump's judges - steeped in Heritage Foundation economics that insists that monopolies are "efficient" - find in their favor if they do?
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Inflation has lots of causes, it's true. But when an industry is consolidated enough to take advantage of a data brokerage or just engage in tacit collusion, any source of inflation - war, disease, weather - allows whole sectors to raise prices together, and keep them high, long after the shock has passed.
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http://martinhench.com
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Image:
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CC BY 3.0
https://creativecommons.org/licenses/by/3.0/deed.en
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@pluralistic to be fair, monopolies ARE efficient, for the monopolist that is. Next to no money for marketing, no need to invest in useless bling just to top the competition. I’d argue that right now, a lot of money and resources is wasted for mediocre and potentially dangerous AI tech, just because Big IT doesn’t want to look bad.
As a consequence, having the state as a monopolist can be beneficial. Why build five cell networks if one would do just fine? Greed is the issue here.
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And yet it is a crime if I reverse engineer an app? In times like these the ethical hackers are the black hats.
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"
La propuesta regulatoria central de Tech es "no es un delito si lo hacemos con una aplicación". No es un taxi sin licencia si lo hacemos con una aplicación. No es una habitación de hotel ilegal si lo hacemos con una aplicación. No es un valor no registrado si lo hacemos con una aplicación. No es robo de salario si lo hacemos con una aplicación.
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Si desea una versión en formato de ensayo de este hilo para leer o compartir, aquí hay un enlace a él en pluralistic.net, mi blog sin vigilancia, sin publicidad y sin rastreadores:
https://pluralistic.net/2025/01/25/potatotrac/#carbo-loading
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@pluralistic
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@pluralistic And, even without reading this thread (which I will), your introduction is exactly why I have so few apps on my phone. And any apps that I installed on my phone are open source, ad free, and free. I so wish there was a ready for prime time mobile Linux OS.
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@pluralistic Exactly. Add banking with an app is "shadow banking" and therefore exempt from the law. Forget the attitude of fake-it-till-you-make-it tech sector. The real problem is an easily distracted federal government in the US that either says "Well it must be exempt from law if it's not brick and mortar," or "We need to pressure these apps into enforcing our laws since government can't and won't."
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@pluralistic after re-telling this to my wife, I added the ironic - “dream country USA”, her response “nightmares are also dreams”;)
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text/gemini
