Where Not To Die In 2022: The Greediest Death Tax States

Should death be taxing? Amid budget surpluses, states started slashing income taxes last year. But only two have made significant changes to their estate or inheritance taxes so far. Last year Iowa legislators decided to phase out the state’s inheritance tax by January 1, 2025. And this year Nebraska legislators made pro-taxpayer tweaks to its inheritance tax for deaths occurring on or after January 1, 2023.

Other jurisdictions have lessened the tax bite for dying in 2022—through previously scheduled changes or inflation adjustments. But some, without inflation adjustments, are still taxing estates at levels that haven’t budged for years, meaning more families are getting surprise death tax bills. In one of those states—Massachusetts—Democratic legislators are pushing for changes to spare more estates from the tax as part of a broader tax reform package this summer.

In all, 17 states and the District of Columbia levy estate and/or inheritance taxes. Maryland is the outlier that levies both. If you live in one of these states—or might retire to one—pay attention.

These taxes operate separately from the federal estate tax, which applies only to a couple thousand estates a year valued at over $12.06 million per person. (That number is set to drop roughly in half on January 1, 2026, when the Trump tax cuts that temporarily doubled the base exemption from $5 million to $10 million expire.) While few individuals need to plan around the federal estate tax, the state levies all kick in at much lower dollar levels, often making it a middle class problem.

Consider the current state estate tax in Massachusetts. The $1 million estate tax exemption hasn’t been adjusted for inflation since 2006, so it can hit the heirs of middle class folks who have seen their houses and retirement accounts appreciate.

“You can be real estate rich with a modest home, and your estate could be subject to this,” says Scott Cashman, a tax manager with Bowditch & Dewey in Worcester, Massachusetts. “It’s becoming more of an issue every year.” If the $1 million exemption amount set in 2006 had been adjusted for inflation, it would be closer to $1.5 million today.

Say a widow or widower died with a house worth $535,000, a $200,000 bank account, a $350,000 retirement account, and a $15,000 car, for a $1.1 million gross estate. Assuming $50,000 in deductions, the estate tax would be $20,500, he calculates.

(There’s no estate tax when assets are left to a spouse, but in this case the heirs are children.) If the house is worth $1 million, however, the tax would be $65,360— one third of the cash in the bank. Adding to the pain is what’s known as the cliff: Once the $1 million mark is crossed, the estate tax applies to everything over $40,000. “I don’t know if most legislators understand that,” he says.

A bill introduced by Democratic state senators would double the Massachusetts exemption amount to $2 million and only levy tax above that amount, removing the dreaded cliff. “We have such a surplus now, this is the time to do it,” says Cashman. “There’s broad-based support for reform.”

Inheritance taxes—levied in 6 states—can kick in at far lower levels, with the exemption and tax rate depending on the heir’s relationship to the deceased. In New Jersey, for example, if you leave your estate to a Class D beneficiary—including a nephew or non-civil-union partner—they’re taxed at 15% on assets up to $700,000 and 16% on assets above $700,000.

In Nebraska, lawmakers this year fell short of inheritance tax repeal but succeeded in chipping away at the state’s inheritance tax. The new law, effective Jan. 1, 2023, cuts the top tax rates (from 18% to 15%, for example) and increases the exemption amounts (from $10,000 to $25,000, for example). It also eliminates inheritance taxes for heirs under 22, and it makes unadopted step-relatives taxed at the lower rate for nearer family members and not the higher rate for unrelated heirs.

“Lawmakers wouldn’t agree to a general phase-down of the tax at this point that would apply to everyone, but they were willing to accept that if a younger person were to inherit property or cash (and we can use a lot more young residents and entrepreneurs in Nebraska) that it’s not in the state’s economic interest to take any of it away from them,” says Adam Weinberg, communications director with the Platte Institute, which is continuing its effort to repeal the inheritance tax in Nebraska.

Meanwhile, Connecticut, the least taxing of the estate tax states, is on schedule to increase its exemption to $9.1 million in 2022, and then to match the federal exemption for deaths on or after January 1, 2023. In an unusual nod designed to keep the richest taxpayers in the state, Connecticut has a $15 million cap on state estate and gift taxes (which represents the tax due on an estate of approximately $129 million).

Other states with 2022 changes: Washington, D.C. reduced its estate tax exemption amount to $4 million in 2021, but then adjusted that amount for inflation beginning this year, bringing the 2022 exemption amount to $4,254,800. Several states, which all have set their exemption amounts at different base levels, also see inflation adjustments for 2022. Maine’s is $6,010,000, while New York’s is $6,110,000. In Rhode Island, the 2022 exemption amount is $1,648,611.

I cover personal finance, with a focus on retirement planning, trusts and estates strategies, and taxwise charitable giving. I’ve written for Forbes since 1997.

Source: Where Not To Die In 2022: The Greediest Death Tax States

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How To Protect Yourself From Overdraft Fees

Citing the impact of Covid-19 on many consumers’ finances, some banks, including Ally Bank and KeyBank, have stopped charging overdraft fees or have offered relief from them. Other banks, however, have gone in a different direction. Between March 13, 2020, and September 20, 2021, account holders filed over 1,600 complaints against various banks to the Consumer Financial Protection Bureau (CFPB) about overdraft fees, the agency’s records show.

“Wells Fargo picks and chooses when they are going to charge overdraft fees and when they are going to pay a bill or not,” one complaint filed against Wells Fargo on September 1, 2021, reads. “I will go to sleep and my account [is] positive and there is enough to cover pending charges. Then all of sudden days later the date of the [charge] is changed and I have been charged an overdraft fee. They have recently even had notices within the app that says your balance amount may not be accurate.”

These fees, which can be as high as $35 per overdraft transaction, are an incredible hardship for some consumers. As the complaint continues, “I have a second chance checking account and because of some hardships I am limited in who I can bank with. I feel like Wells Fargo takes advantage of the underprivileged.”

Overdraft fees composed $2.32 billion of those service charges in Q4, a 64 percent spike from Q2 2020

Though some US banks temporarily paused on charging overdraft and other service fees, an analysis of banks with more than $1 billion in assets and some smaller institutions that chose to disclose data suggests that banks are on their way to charging service fees at pre-pandemic levels even as the Covid-19 pandemic resurges.

A March 2021 report from S&P Global Market Intelligence indicated that banks collected $3.6 billion in service fees in the fourth financial quarter of 2020. Overdraft fees composed $2.32 billion of those service charges in the quarter, a 64 percent spike from just six months prior in the second quarter of 2020, the report noted.

Put simply, these fees amount to another tax on the poor, an extraction from the country’s poorest Americans to its wealthiest banks, experts say. Overdraft fees are meant to safeguard banks from risks associated with covering account holders’ overspending, but they can disproportionately hurt low-income consumers who need protection the most, experts told Vox.

Lawmakers and advocacy groups had called for the curtailing of these fees even before the Covid-19 pandemic disrupted the US economy. Now, the call to regulate bank fees has returned as the coronavirus crisis continues to upend consumers’ financial lives.

Why do banks charge account maintenance and overdraft fees?

The FDIC defines overdraft fees as a fee assessed whenever an account holder spends more than what’s in their account. Banks may also charge an account maintenance fee, also known as monthly service fees, just for having the account or for falling below a certain minimum balance, per the FDIC. Banks, of course, can charge a range of other fees, including ATM use fees, per-check fees, and stop-payment fees.

It’s hard to pinpoint when banks began charging overdraft fees in the US. Vox reached out to JPMorgan Chase, Wells Fargo, and Bank of America to ask when they started charging account maintenance and overdraft fees, but none of them shared when they implemented these charges.

According to a 2020 report from the Center for Responsible Lending, banks historically declined debit card charges when account holders lacked the funds to cover charges. But over time, banks — at the urging of software consultants who were promoting overdraft programs on a contingency fee basis — began allowing overdraft transactions to go through and charging customers fees.

“I think that at some point it was clear that it was a helpful situation, so that bills didn’t bounce, checks didn’t bounce, mortgage payments didn’t bounce,” said Peter Smith, senior researcher at the Center for Responsible Lending. “This was a fairly informal service, but when people started using debit cards more [and] people started using electronic payments more, I think banks began to see this as an opportunity for revenue and not just a convenience service they could offer their account holders.”

“I think banks began to see this as an opportunity for revenue and not just a convenience service they could offer their account holders”

Though overdraft fees can be costly for low-income households, they make up a small share of banks’ overall income. Per the Center for Responsible Lending’s analysis, bank overdraft fees average $35. That fee tends to be higher than the value of the transaction that triggers it, which is $20 on average. For banks with assets of $1 billion or more, overdraft or insufficient funds fees are about 5 percent of their non-interest income, the report noted.

Banks charge overdraft fees to account for the risks associated with covering charges on overdrawn accounts, said Deeksha Gupta, assistant professor of finance at the Tepper School of Business at Carnegie Mellon University. Though banks are profitable without charging these fees, they want to avoid risks for paying merchants’ charges and deter account holders from overspending, Gupta said.

Bank fees’ impact on vulnerable consumers

Banks don’t want to take on the risks of covering consumers’ overdrawn transactions, but it remains up for debate whether the fee is truly worth it given its impact on low-income consumers. Overdraft fees tend to prey upon low-income consumers, Rebecca Borné, senior policy counsel at the Center for Responsible Lending, said. The center’s 2020 report found that 9 percent of bank account holders pay 84 percent of the more than $11 billion overdraft fees banks collect every year.

Borné said while other fees serve a function — it does cost banks to administer checking accounts, rendering account maintenance fees somewhat necessary, for instance — with overdraft, the effect is different. Besides charging a high overdraft fee per transaction with insufficient funds, banks engage in a range of practices that can leave customers with compounding overdraft fees, including charging more than one fee per day, charging fees for debit card purchases and ATM withdrawals, and imposing another overdraft fee if previous fees aren’t paid within a set period of time, the Center for Responsible Lending’s report explained.

As some banks resume charging overdraft fees, pre-pandemic research suggests such fees play a role in excluding unbanked consumers from accessing traditional bank accounts. According to the FDIC’s 2019 How America Banks report, about 5.4 percent (7.1 million) of US households were unbanked, meaning nobody in the household had a checking or savings account at a bank or credit union.

Among the reasons why respondents said they don’t have a bank account: Almost half of respondents said they don’t have enough money to meet minimum balance requirements, and more than a third said bank account fees are too high.

Complaints filed to the CFPB offer a window into consumers’ struggles with overdraft charges. “In … 2021, US Bank had enrolled me into an overdraft protection program which I never authorized. One time I was out traveling and forgot to put money in my checking account, and my balance hit negative. I was unaware and kept using my debit card for small transactions like coffee,” reads one complaint filed August 27 against US Bancorp. “The majority of these transactions are below [$10].

Instead of declining these charges, US Bank charged me a series of overdraft fees, each of them [$36]. In the end, the total overdraft fees ended up being [$360] for over a couple of days. They waived three of them, bringing my loss down to [$250] … Talking to their customer service, they never offered an option to opt out of their overdraft ‘protection’ program. They offered some even more predatory protection options instead which I declined.”

With bank fees pushing consumers away from traditional bank accounts, vulnerable consumers may be driven to use even costlier alternative financial services. According to a May 2020 Federal Reserve report, 16 percent of US adults were underbanked in 2019, meaning they had a traditional bank account, but also used alternative financial services like check cashing services, money orders, and payday loans.

The report also noted that unbanked and underbanked Americans were more likely to have lower education levels, be people of color, or have lower incomes. For consumers who are worried about overdraft fees, they’d rather turn to riskier alternatives instead.

As for why consumers turn to alternative financial services, some consumers have no other option, and these alternatives are actively targeting them. The Federal Reserve report noted that 43 percent of credit applicants with incomes of less than $40,000 were denied credit, compared to 9 percent of applicants who earn more than $100,000.

Even for underbanked consumers who have traditional bank accounts, payday lenders and other high-cost installment lenders aggressively target customers in low-income neighborhoods, communities of color, and people who need extra cash, Borné wrote in a follow-up email. Meanwhile, banks don’t always offer affordable small loans for consumers, and they have little incentive to do so because regulators can allow them to charge high overdraft fees for each overdraft, she added.

“Those who go to payday lenders because they believe they will be in and out of the loan quickly are often stuck for the long term, incurring a lot of overdraft fees when the payments are extracted from their accounts,” Borné wrote. “Ultimately, they often lose their accounts. These wealth-draining products tend to feed each other, creating needs rather than filling them, and leaving customers with fewer credit options down the line.”

“These wealth-draining products tend to feed each other, creating needs rather than filling them”

Gupta agreed underbanked and unbanked consumers are often forced to turn to more expensive alternatives. As the coronavirus pandemic continues with no discernible end in sight and assistance programs come to an end, overdraft and account maintenance fees can compound for households that are struggling now, she added.

“Ideally, the banking system should be helping low-income consumers. We don’t want that type of money to be flowing from lower-income households to banks because they’re in overdraft,” Gupta said of the billions of dollars in overdraft charges.

Even though overdraft fees and other service charges make up a small share of major banks’ revenue, some experts questioned whether limiting these fees would disincentivize banks from offering affordable financial services that could attract low-income consumers. As Gupta explained, some banks could opt not to offer certain affordable bank accounts to avoid taking on additional risk. An April paper from the Consumer Financial Protection Bureau also suggested that capping overdraft fees could cause banks to offer fewer affordable account options for low-income people.

What to do if you’re being charged too much in overdraft fees

Banks could do a better job of disclosing bank fees to consumers, said Desmond Brown, assistant director of the CFPB’s office of consumer education. He said depending on the institution, overdraft fees can be structured in a complex way. Some bank accounts offer the option to opt in to overdraft fees, so consumers should see whether it’s an option to opt out when looking for a new account.

When signing up for a new account, Brown said, consumers concerned about fees should shop around and ask for bank accounts that are tailored to low-income consumers and learn about the bank’s cost structures. Consumers can also look for banks that provide alerts when their funds are low, he added.

Brown also encouraged consumers to file complaints with the agency if they’re experiencing fee problems with their bank. Doing so not only allows CFPB to assist consumers directly, but it also helps the agency assess issues happening in the marketplace, he said.

“If we have seen a spike in an area of complaints, then we can look to other tools at the bureau to help drill down and find out exactly what’s going on, and be more responsive to consumer needs,” Brown said.

For consumers looking for affordable bank accounts, Brown pointed to the FDIC’s Model Safe Accounts program, which works with banks to determine how they can offer affordable bank accounts. Some financial services firms offer accounts with no overdraft or account maintenance fees.

(In their respective statements, JPMorgan Chase said during the pandemic it has waived $650 million in fees, including overdraft fees, between January 2020 and March 2021; and Wells Fargo touted its low-cost, no-overdraft-fee bank account, its zero balance alerts, and its overdraft fee waivers.)

“We’re talking about billions of dollars every single year being drained, disproportionately from Black and brown communities”When asked what the agency is doing to assist consumers who’ve been charged excessive overdraft fees, a CFPB spokesperson said, “Overdrafts have the potential to be very costly for consumers, and we are continuing to closely monitor developments in this area.”

But as consumers file complaints or seek low-cost bank accounts on their own, advocacy groups and lawmakers have pushed for more restrictions on overdraft fees. On June 30, Rep. Carolyn Maloney (D-NY) introduced the Overdraft Protection Act of 2021, a bill that aims to regulate the marketing and charging of overdraft fees at financial firms. During a House Committee on Financial Services hearing on July 21, Borné provided a statement on behalf of the Center for Responsible Lending calling for Congress to hold regulatory agencies like the CFPB to protect consumers from harmful overdraft fee practices.

“What to me is especially frustrating is that financial inclusion is all the buzz in a lot of circles. I feel like in a lot of these conversations people just try to talk around the elephant in the room, which are bank overdraft practices,” said Borné. “We’re talking about billions of dollars every single year being drained, disproportionately from Black and brown communities, and kicking people out of the banking system, eroding trust in banks. It’s just a huge barrier to real financial inclusion.”

Source: How to protect yourself from overdraft fees

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How Much Control Should Apple Have Over Your iPhone and The App Store

This story is part of a Recode series about Big Tech and antitrust. Over the next few weeks, we’ll cover what’s happening with Apple, Amazon, Facebook, Google, and Microsoft.

We love our mobile apps. It’s hard to think of something that at least one of the nearly 12 million apps out there can’t do. Order a taxi, buy clothes, get directions, play games, message friends, store vaccine cards, control hearing aids, eat, pray, love … the list goes on. You might be using an app to read this very article. And if you’re reading it on an iPhone, then you got that app through the App Store, the Apple-owned and -operated gateway for apps on its phones. But a lot of people want that to change.

Apple is facing growing scrutiny for the tight control it has over so much of the mobile-first, app-centric world it created. The iPhone, which was released in 2007, and the App Store, which came along a year later, helped make Apple one of the most valuable companies on the planet, as well as one of the most powerful. Now, lawmakers, regulators, developers, and consumers are questioning the extent and effects of that power — including if and how it should be reined in.

Efforts in the United States and abroad could significantly loosen Apple’s grip over one of its most important lines of business and fundamentally change how iPhone and iPad users get and pay for their apps. It could make many more apps available. It could make them less safe. And it could make them cheaper.

The iPhone maker isn’t the only company under the antitrust microscope. Once lauded as shining beacons of innovation and ingenuity that would guide the world into the 21st century, Apple is just one of several Big Tech companies now accused of amassing too much power over parts of the economy that have become as essential as steel, oil, and the telephone were in centuries past.

These companies have a great deal of control over what we can do on our phones, the items we buy online and how they get to our homes, our personal data, the internet ecosystem, even our online identities. Some believe the best way to deal with Big Tech now is the way we dealt with steel, oil, and telephone monopolies decades ago: by using antitrust laws to place restrictions on them or even break them up. And if our existing laws can’t do it, legislators want to introduce new laws that target the digital marketplace.

In her book Monopolies Suck, antitrust expert Sally Hubbard described Apple as a “warm and fuzzy monopolist” when compared to Facebook, Google, and Amazon, the other three companies in the so-called Big Four that have been accused of being too big. It doesn’t quite have the negative public perception that its three peers have, and the effects of its exclusive control over mobile apps on its consumers aren’t as obvious.

For many people, Facebook, Google, and Amazon are unavoidable realities of life on the internet these days, while Apple makes products they choose to buy. But more than half of the smartphones in the United States are iPhones, and as those phones become integrated into more facets of our daily lives, Apple’s exclusive control over what we can do with those phones and which apps we can use becomes more problematic. It’s also an outlier; rival mobile operating system Android allows pretty much any app, though app stores may have their own restrictions.

Apple makes the phones. But should Apple set the rules over everything we can do with them? And what are iPhone users missing out on when one company controls so much of their experience on them?

Apple’s vertical integration model was fine until it wasn’t

Many of the problems Apple faces now come from a principle of its business model: Maintain as much control as possible over as many aspects of its products as possible. This is unusual for a computer manufacturer. You can buy a computer with a Microsoft operating system from a variety of manufacturers, and nearly 1,300 brands sell devices with Google’s Android operating system. But Apple’s operating systems — macOS, iOS, iPadOS, and watchOS — are only on Apple’s devices. Apple has said it does this to ensure that its products are easy to use, private, and secure. It’s a selling point for the company and a reason some customers are willing to pay a premium for Apple devices.

Apple doubled down on that vertical integration strategy when it came to mobile apps, only allowing customers to get them through the App Store it owns and operates. Outside developers have to follow Apple’s approval process and abide by its rules to get into the App Store. Apple has a lot of content restrictions for apps that the company says are intended to keep users safe from, for instance, “upsetting or offensive content.” Apple says in its developer guidelines, “If you’re looking to shock and offend people, the App Store isn’t the right place for your app.” But that means Apple mobile devices — more than 1 billion of them worldwide — aren’t the right place for your app, either.

Developers whose apps do make it into the App Store may also find themselves paying Apple a hefty chunk of their income. Apple takes a commission from purchases of the apps themselves as well as purchases made within the apps. That commission is up to 30 percent and has been dubbed the App Store tax. There’s no way for apps to get around the commission for app purchases, and users have to pay for goods and services outside of the app to get around the in-app payment system’s commission.

Some of those developers are also competing with Apple when it comes to making certain kinds of apps. Developers have accused Apple of “Sherlocking” their apps — that’s when Apple makes an app that’s strikingly similar to a successful third-party app and promotes it in the App Store or integrates it into device software in ways that outside developers can’t. One famous example of this is how, after countless flashlight apps that used the iPhone’s camera flash became popular in the App Store, Apple built its own flashlight tool and integrated it into iOS in 2013. Suddenly, those third-party apps weren’t necessary.

Apple has also been accused of abusing its control to give it an advantage over streaming services. Spotify has complained for years that Apple has given an unfair competitive advantage to its Apple Music service, which came along a few years after Spotify. After all, Apple doesn’t have to pay an App Store tax for its own Music app, which comes pre-installed on iPhones and iPads, or the streaming service, which Apple can and does promote on its devices. (Apple points out that it only has 60 of its own apps, so clearly it’s not competing with every single third-party app in its store, or even the vast majority of them.)

“What Apple realized is that if they could control the App Store, they really control the rest of the game,” Daniel Hanley, senior legal analyst at Open Markets Institute, an anti-monopoly advocacy group, told Recode. “They don’t just control the hardware, now they control the software. They control how apps get on — it’s unilateral.”

This has all been a big moneymaker for Apple. Apple won’t say how big, but an expert said he believes the App Store alone made $22 billion in 2020, about 80 percent of which was profit. That profit margin estimate suggests that the mandatory commissions Apple takes from those apps far exceed the company’s costs for maintaining the App Store.

Because Apple refuses to allow alternate app stores or in-app payment systems, there’s no competition that might motivate it to lower those commissions — which could, in turn, allow developers to charge less for apps and in-app purchases. The House Judiciary Subcommittee on Antitrust’s report from the Democratic majority cited numerous examples of developers claiming that they had to raise their own prices to consumers to compensate for Apple’s commission.

Apple disputes some of these numbers but, again, refuses to give its own. Its financial statements lump the App Store in with other “services,” including iCloud and Apple’s TV, Music, and Pay. Even so, there’s little doubt that the App Store’s success has helped, if not driven, Apple’s transition from being primarily a hardware company to a goods and services provider.

“It’s a nice, fat [revenue] stream where they don’t have to do a ton of R&D,” Brian Merchant, technology journalist and author of The One Device: The Secret History of the iPhone, told Recode. “All they have to do is protect their walled garden.”

The case for only one App Store (Apple’s)

Apple says the security and privacy features its customers expect are impossible to provide without having this control over the apps on its phone. The company calls this a “trusted ecosystem.”

Craig Federighi, Apple’s senior vice president of software engineering, recently said that allowing Apple users to get apps through third-party app stores or by downloading them directly from the open internet (a practice known as sideloading) would open them up to a “Pandora’s box” of malware, though iPhones aren’t exactly immune to spyware. Similarly, Apple says its in-app payment systems are secure and private, which it can’t guarantee of anyone else’s.

These arguments aren’t necessarily wrong — there are plenty of malicious apps out there — but they don’t account for the fact that Apple doesn’t seem to have any problem with its Mac computers getting their apps from third-party app stores or through sideloading.

As for those commissions, Apple is quick to point out that the vast majority of apps, which are free, don’t pay Apple anything at all and still get all of the App Store’s benefits. Many apps are funded by selling ads and user data, which they don’t have to share with Apple, though Apple has recently tried to make this outside revenue stream less lucrative for developers by introducing anti-tracking features into iOS.

Those measures, which Apple says are designed to improve user privacy, could ultimately force developers to charge users for apps (more money for Apple!). So when Apple decided to stop much of that data flow, it upended an entire ecosystem worth hundreds of billions of dollars a year — Facebook was even reportedly considering filing an antitrust lawsuit over it. That’s how much control Apple has over its devices and, by extension, a considerable part of the global economy.

A privacy pop-up on an Apple iPhone reads, “Allow Facebook to track your activity across other companies’ apps and websites? This allows Facebook to provide you with a better ads experience. Ask app not to track. Allow.”
A privacy notice on an iPhone allows the user to decide whether to permit cross-app tracking.
Christoph Dernbach/picture alliance via Getty Images

The App Store tax is also in line with what other app stores charge, per an independent report that Apple commissioned last year. Apple, the app store pioneer, was the one that set that 30 percent app store commission rate in the first place.

And Apple does allow for ways to get around some of its App Store taxes. People can purchase subscriptions and certain in-app services outside of apps if they have an account with the developer, which means no App Store tax to either raise prices or cut into the developer’s profit margin. Going to the developer’s website to pay also takes several more steps and more time on the part of the customer to do it.

But in the US, Apple’s best defense against accusations that its App Store is an illegal monopoly may be to simply point to existing antitrust laws, or at least how courts interpret them. Apple does have a monopoly on app stores on Apple devices, but there’s nothing necessarily illegal about that. Monopolies are only illegal if they operate in anti-competitive ways, and the bar to proving even that is pretty high. For the last four decades, courts have interpreted the law as protecting competition (and, by extension, the consumers who supposedly benefit from it), not competitors.

“Our law is very, very conservative,” Eleanor M. Fox, a professor of antitrust law and competition policy at New York University, told Recode. “Companies — even monopoly companies — do not have a duty to deal, and they don’t have a duty to deal fairly.”

We’ve seen this precedent at work in the Epic Games v. Apple case. In August 2020, Epic Games, the developer behind the popular game Fortnite, sued Apple over its refusal to allow alternate app stores and payment systems, as well as its anti-steering policy that forbids developers from linking out to alternate ways to pay for app services or even telling users that other payment methods are possible. Apple kicked Fortnite out of its App Store when Epic tried to flout its rules. A federal judge ruled in September that Apple was well within its rights to do so.

The judge noted that the App Store had “procompetitive justifications.” Even though she found that Apple had a large part of the mobile gaming transactions market and that the App Store’s profit margins were “extraordinarily high,” she didn’t think it created a barrier to entry for developers, nor that it was harming innovation. (Epic has appealed this ruling.)

“Success is not illegal,” the judge wrote.

Epic’s only victory was that the judge ordered Apple to allow developers to link out to and inform users about other ways to pay for app services. Apple was able to delay that particular ruling, and according to a court filing, the company may even try to charge commissions on purchases made through the alternate payment systems if it’s forced to let developers link out to them. Even when Apple loses, it tries to find a way to win.

A person in a dark suit carries two large binders full of papers.
Legal staff representing Epic Games carry documents for trial at the United States District Court in Oakland, California, in May.
Philip Pacheco/Getty Images

Apple’s attempts to avoid antitrust actions

While Apple insists that it isn’t doing anything wrong, the company appears to be concerned that its control over its devices faces some real threats. Apple historically refuses to give up ground on just about everything, yet it’s already made notable adjustments to some of its more controversial policies that could make some apps or services cheaper, or at least easier for the user to find cheaper ways to pay for them. Some of these changes were mandatory, yes, but others appear to be an effort to ward off harsher regulations or judgments.

For instance, Apple loosened its notoriously tight grip on repairs to its devices, allowing more independent shops and, very recently, individual consumers, to have access to the parts and instructions necessary to make certain fixes. This comes in the midst of a push for “right to repair” laws and pressure from the Biden administration and the Federal Trade Commission. But Apple still requires that its own parts be used for these repairs and sets the prices for them.

The stickiness and required usage of Apple’s native apps has long been a gripe from many iPhone users and a bad look for the company from an antitrust perspective. So this year, Apple started allowing users to select their own default apps for web browsing and mail; previously, Apple’s Safari and Mail apps were the mandatory default. Users have been able to delete most of the Apple apps that come pre-installed on their phones since 2018.

Apple has also given some developers a break on the App Store tax and anti-steering policies, which could reduce prices for consumers. Developers who make less than $1 million a year now only have to pay a 15 percent App Store tax. This came about as part of a settlement of a class action lawsuit, but Apple has presented it as a “Small Business Program” that’s “designed to accelerate innovation” (a phrase that could be read as implying that the 30 percent commission decelerated innovation).

Apple is also going to let developers contact customers outside of the app to let them know about alternate payment methods. As part of an agreement with the Japan Fair Trade Commission, Apple will soon let “reader” apps (that is, apps like Netflix and Spotify that offer media for purchase or subscription) link out to their own websites to make it easier for users to purchase subscriptions outside of Apple’s in-app payment system.

In 2016, Apple also cut its commission to 15 percent for subscription apps after the first year. Of course, this change was revealed at the same time as Apple’s announcement that it would sell search ads in its App Store, giving itself yet another exclusive source of revenue (and giving users a bunch of ads when they search the App Store).

But these concessions do nothing for the source of the vast majority of the App Store’s commissions: games from developers that make more than $1 million a year. And Apple hasn’t wavered on the practices that have drawn the bulk of the accusations that Apple’s practices — including the company not allowing alternate App Stores or sideloading, and not allowing alternate payment systems — are anti-competitive, increase prices for consumers, and reduce their choice. It seems unlikely that Apple will give way any time soon. Unless, of course, it has to.

How does Apple’s walled garden grow — or die?

There are plenty of reasons why Apple might have to change its ways. The company may have won most of the Epic Games lawsuit (pending Epic’s appeal), but it still faces antitrust action on several fronts that will play out over the coming years.

Margrethe Vestager speaking onstage in front of a wall that reads, “Antitrust: Apple App Store practices Music streaming.”
Margrethe Vestager, European commissioner for competition, speaks during an online news conference on the Apple antitrust case at EU headquarters in Brussels, in April.
Francisco Seco/AFP via Getty Images

A growing number of countries have introduced or proposed laws that specifically target certain App Store practices, or are investigating Apple for potential violations of their competition rules. These include but are not limited to the European Union, the United Kingdom, Germany, the Netherlands, Japan, South Korea, and Australia.

Those could result in fines, which Apple, a $2 trillion company, probably isn’t too worried about. It also wouldn’t be the first time Apple has paid a considerable sum over antitrust violations. Another outcome — one that would be a much more troubling prospect for Apple — would be if the company were forced to change its business practices in order to keep operating in those countries.

But in the United States, courts haven’t seemed too bothered by Apple’s App Store rules. A federal judge recently threw out a class action lawsuit from developers that said Apple was abusing its monopoly power by refusing to allow their apps in the App Store. As the Epic Games ruling indicates, American antitrust laws (and most courts’ interpretation of them) haven’t done much to change or force change on Big Tech companies. If you’re a lawmaker who is concerned about Big Tech’s considerable power, that’s a green light to propose laws that will.

Sen. Amy Klobuchar (D-MN), for example, said the ruling showed that “much more must be done” about the “serious competition concerns” app stores raise. As chair of the Judiciary Committee’s Subcommittee on Antitrust, as well as a member of the Commerce Committee, she’s in a pretty good position to push through bills that do just that.

Klobuchar is a co-sponsor of the Open App Markets Act, a bipartisan, bicameral bill that would do most of what Epic Games wanted. The legislation would force Apple to allow third-party app stores and the sideloading of third-party apps, require that app stores allow alternate payment systems, and forbid anti-steering policies. It would also ban app stores from giving their own apps special treatment or using non-public data from third-party apps to develop their own, competing apps.

The Open App Markets Act isn’t the only bill that could drastically change how Apple runs its App Store. Several more are currently making their way through both houses of Congress as part of its package of antitrust bills that target Big Tech. If passed, they’d also force Apple to include other app stores on its devices and forbid it from giving its own apps special treatment. One bill, the Ending Platform Monopolies Act, would even force Apple to break up its App Store and app development units into separate businesses.

All of these bills are bipartisan, but it’s far from certain that any of them will become law. If they do, and in something close to their current form, they could benefit consumers by giving them more choice of apps on their phone, and it could make those apps cheaper. It may also subject iPhone users to additional safety and security threats, as Apple alleges, while prices stay largely unchanged.

Apple says it supports updates to laws and regulations that benefit consumers, like privacy legislation — which the current bills on the table don’t do much to directly address.

The Department of Justice, which has been investigating Apple since 2019, is reportedly preparing a lawsuit concerning the App Store. It and the FTC enforce America’s antitrust laws. Both agencies are headed up by people who have accused Apple of anti-competitive actions or worked for firms that have. Lina Khan, a Big Tech critic who helped write the House’s report, is now the chair of the FTC, and Jonathan Kanter, who advised Spotify when it lobbied Congress to take action against Apple, leads the DOJ’s antitrust division. Both agencies may get a major, needed funding boost if the Build Back Better Act and a bill that increases merger fees for large companies pass.

With all of this said, Apple, “the warm and fuzzy monopolist,” is probably in a better position with its ongoing antitrust problems than its fellow Big Tech titans are with theirs. It has, so far, faced relatively less criticism in general, and many of the proposed bills and regulations don’t threaten its business model as much as they do that of the other companies. If Apple were forced to allow other app stores on its devices tomorrow, it would still have plenty of very healthy revenue streams.

Those may still include the App Store. It’s not clear that many of Apple’s users would even use or want another app store. The fact that they use an iPhone and not an Android speaks to this. They could prefer or trust the security and privacy protections in the App Store over those of, say, a Facebook app store. Then again, if those other app stores took a lower commission from developers, allowing them to charge less than the Apple App Store does, Apple’s customers may well vote with their wallets, and developers might only offer their apps in stores that give them a better margin. In which case, Apple might just find itself finally having to compete for apps and customers — and maybe even lowering the App Store tax to do it. Apple wouldn’t be thrilled, but it would be just fine.

Update, December 9, 3:50 pm ET: This article has been updated to reflect that Apple won its appeal to delay implementing the court order to allow apps to link out to other payment methods.

Sara Morrison

 

Source: How much control should Apple have over your iPhone and the App Store? – Vox

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Amazon Funds Its Empire By Squeezing Its Marketplace Sellers

Amazon has always presented its Marketplace, where outside businesses sell products through Amazon’s platform, as one of its biggest success stories: mutually beneficial to Amazon, sellers, and customers alike. But a new report says those benefits are increasingly lopsided — in Amazon’s favor.

The report, which comes from the nonprofit Institute for Local Self-Reliance (ILSR), asserts that Amazon takes a larger and larger cut of sellers’ earnings through the various fees it levies on them. These fees have become so lucrative for Amazon that they now represent the company’s most profitable segment as well as its fastest-growing revenue stream, according to ILSR. And because sellers are paying Amazon high fees, customers may face inflated prices, even when they shop beyond Amazon’s borders.

“Amazon is the only winner here,” Stacy Mitchell, ILSR co-director and author of the report, told Recode. “It’s exploiting its monopoly power over these small businesses to pocket a huge and growing cut of their revenue.”

You might consider this to be a good business strategy on Amazon’s part, as it’s certainly paid off for the company. And some sellers on Amazon’s platform say they’re happy with the arrangement — at least, for now. But a growing number of others argue that Amazon’s dominance over the e-commerce market and its power over its sellers has given rise to anti-competitive practices that hurt Amazon’s competitors, competition in general, and consumers.

“Amazon’s dominance is bad for businesses, jobs, and America’s competitiveness,” Rep. David Cicilline, chair of the House Judiciary Antitrust Subcommittee, told Recode. “This important study makes clear that Amazon is crushing sellers through abusive policies that make it nearly impossible for everyday businesses to get ahead.”

These are some of the same issues identified by regulators and lawmakers who have accused Amazon of abusing its market dominance. They say it’s further evidence that action must be taken to curb Amazon’s power — and some of them are already working on legislation.

“It is important to understand how tech platforms can exploit their power to hurt small businesses and raise prices for consumers,” Sen. Amy Klobuchar, chair of the Senate Judiciary Antitrust Subcommittee, told Recode. “This report highlights how Amazon’s tactics can lead to that result and why Congress must act to set clear rules of the road for the digital giants that dominate our online economy.”

Amazon disputes the report’s findings, calling it “intentionally misleading” for lumping its mandatory fees and optional services together as “seller fees.” Amazon maintains that all of its fees — mandatory and optional — are competitive with what similar services charge, and that many sellers are successful without taking advantage of those optional services. But Mitchell says many sellers feel compelled to pay those ostensibly optional fees if they want their businesses to stay afloat.

Marketplace: The gift that keeps on giving (to Amazon)

Marketplace is a huge part of Amazon’s business. In his 2020 letter to shareholders, Jeff Bezos said it accounted for nearly 60 percent of Amazon’s retail sales, which come from nearly 2 million sellers. So when you buy a product on Amazon, chances are it was sold by an independent business using Amazon’s platform. Amazon isn’t providing that platform for free.

“The trade-off that any seller is dealing with is you get access to a huge audience, you get access to scale, the ability to scale your sales, but it comes at a cost to margin,” Andrew Lipsman, principal analyst at eMarketer, told Recode.

The cost to sellers is increasing every year, according to ILSR’s analysis, making business unsustainable for some sellers while Amazon’s profits grow.

The new ILSR report found that Amazon’s seller fees accounted for an average of 19 percent of sellers’ earnings in 2014. That’s almost doubled to 34 percent in 2021. And while seller fees accounted for 14 percent of Amazon’s entire revenue in 2014, that figure is up to 25 percent in 2021. Amazon will pull in $121 billion from seller fees alone, ILSR estimates.

That revenue translates to a lot of profit — more than even Amazon Web Services (AWS), Amazon’s cloud computing platform typically believed to be the company’s most profitable arm. AWS netted $13.5 billion in 2020, according to Amazon’s financial data. ILSR estimates seller fees netted $24 billion. (Amazon says these figures are inaccurate but did not provide its own; the company’s public earnings statements also don’t combine seller fees in this way.)

“Everyone thinks AWS generates all of Amazon’s profits,” Mitchell said. “But in fact, Marketplace is this massive tollbooth that gushes profits.”

Seller fees primarily come from three things: sales, fulfillment, and ads. Every item sold is subject to a referral fee, which is Amazon’s commission. Over the years, that’s stayed pretty consistent at 15 percent (it may be lower or higher, depending on the product category). According to ILSR, those referral fees made up the majority of seller fees as recently as 2017.

Since then, however, the majority of fees come from Fulfillment by Amazon (FBA), Amazon’s service that stores, packs, and ships sellers’ items to customers. Ad revenue is steadily gaining ground as more sellers pay for more ads to get prominent placement on Amazon’s site, including on product pages and search results.

Sellers who use FBA pay Amazon a fee based on the size and type of item they sell. Sellers also have to pay to ship items to and from Amazon’s fulfillment centers and to store them there. For some sellers, this might be a cheaper or easier option than doing it all themselves. Amazon says FBA’s pricing is competitive with similar fulfillment services if not cheaper, and sellers aren’t required to use it.

But help with logistics isn’t the only appeal of FBA for many sellers. Enrolling in the FBA program is the only way that most sellers can qualify for Prime. (Some sellers may qualify for Seller Fulfilled Prime, but it’s not accepting new enrollees at this time.) Getting that Prime badge is huge for a seller. Amazon shoppers — especially those 200 million Prime members — are far more likely to buy products that qualify for Amazon Prime. But that’s not only because they want to take advantage of the free shipping. It’s also because customers may not even see non-Prime offerings in the first place, thanks to the mechanics of the so-called Buy Box.

When multiple sellers offer the same item, Amazon’s algorithm picks one of them to be the default purchase on the product’s page. This is called “winning the Buy Box,” and when the customer clicks to add an item to their cart or to buy now, the seller who won the Buy Box is the one who gets the sale.

Prime items are far more likely to win the Buy Box than non-Prime items, and customers rarely click on that small “other sellers” link or the small “new and used” box where all the other listings are housed. This gives sellers a major incentive to pay for FBA, even if it costs more than taking care of the shipping themselves.

These FBA fees have been great for Amazon, which has dramatically expanded the logistics network that powers FBA as well as the number of sellers participating in the program. Five years ago, about half of Amazon’s top 10,000 sellers worldwide used FBA. By 2019, it was 85 percent. Amazon even offers a version of FBA for products ordered from other e-commerce services, including Shopify. Dave Clark, the CEO of Amazon’s consumer business, believes his company will be the largest delivery service in the United States by early 2022.

FBA aside, there are other ways sellers are paying Amazon more and more in the hope of generating sales. Amazon has been making a big push into digital advertising recently, and seller ads are part of its strategy. Critics have accused Amazon of increasing the number of sponsored slots in search results to increase ad inventory, and of charging more for the ads in them. (Amazon says the number of ads varies, and pricing is determined by an auction.)

Because of this, some sellers feel like they’re paying more and getting less. Amazon itself says these ads increase product visibility, which can translate into more sales. But that also means less visibility for the products in organic search results that earned their placement through strong sales and positive reviews. Sellers are already competing for this space with Amazon’s own products, and that competition might not be fair, as Amazon reportedly ranks its own products above others that had higher ratings. (Amazon has disputed these reports and says its ranking models don’t take into account whether the product is made by Amazon or offered by a third-party seller.)

Either way, many sellers increasingly feel pressure to buy ads just to get the same search placement (and sales) they once got for free. In a statement to Recode, Amazon maintained that FBA and ads are not mandatory and that sellers may find them beneficial.

“Sellers are not required to use our logistics or advertising services, and only use them if they provide incremental value to their businesses,” an Amazon spokesperson said.

How sellers’ problems affect your wallet

If you’re not a seller that relies on Amazon to survive, you might not see how any of this affects you. If you’re an Amazon customer, you might even think that this system is ensuring that you can buy products at the best price. But you might be wrong.

“Whether you shop on Amazon or not, you are paying higher prices because of its monopoly power,” Mitchell said.

When sellers have to raise their prices to account for Amazon’s increased fees, they often pass those costs along to the customer. And, thanks to Amazon’s fair pricing policy, sellers have to offer the same price on other platforms that they do on Amazon — even if their costs to sell on those platforms are less. If they don’t, Amazon may suspend or demote their listings. Sellers don’t want to take that risk, which could be potentially devastating to their business.

This policy could mean that, as sellers adjust their prices to account for Amazon’s fees, prices end up being higher elsewhere, too. It also makes it harder for other e-commerce platforms to compete with Amazon and challenge its market dominance, since they aren’t able to offer lower prices that would attract more customers. The lack of options means sellers are basically stuck with Amazon if they want to reach its exponentially larger and loyal consumer base.

Sellers have helped Amazon grow to own 40 percent and 50 percent (depending which report you cite) of the e-commerce market in the United States, and in some product categories, its share is far higher. Its closest platform competitor, Walmart, has just 7 percent. Amazon is often the first place online shoppers look for products — even before search engines — especially if those shoppers are Prime members. A large, established company can pull itself out of Amazon, as Nike did in 2019, and still do fine. Most businesses don’t have that luxury.

“Small businesses don’t have other options when it comes to the digital economy,” Rep. Ken Buck, the ranking member of the House Judiciary Antitrust Subcommittee, told Recode. “Amazon continues to use their monopoly power to crush competition.”

One solution is for lawmakers and regulators to step in. Some are trying: The European Commission announced last year that it is investigating whether Amazon gave preferential treatment to itself and sellers that used FBA when determining who gets the Buy Box. The fair pricing policy and its potential to inflate prices across the internet is the basis of the District of Columbia’s lawsuit against Amazon, as well as a class action lawsuit filed by Amazon customers last year.

Several members of Congress — Buck, Cicilline, and Klobuchar among them — have introduced bills that would forbid some of Amazon’s practices they believe to be anti-competitive. These bills came out of a 16-month-long House antitrust subcommittee investigation into Big Tech companies, including Amazon. The committee accused Amazon of luring in customers and sellers with artificially low prices and Prime memberships that the company loses money on, only to raise rates as soon as Amazon’s market dominance was assured.

The proposed legislation would forbid Amazon from giving its own products prominent placement, unless it earned that place organically, and from requiring sellers to pay for ads or services like FBA in order to get preferred placement. One bill would forbid Amazon from competing in a marketplace it also owns, and could force Amazon to split off into a first-party sales company and a company that operates a platform for third-party sellers.

Amazon has responded to all of this by denying that such measures are necessary or that it’s doing anything wrong. The company has become one of the biggest lobbying spenders in the country, and it’s been emailing select sellers to warn them that pending antitrust legislation could make it difficult or impossible for them to sell their products on Amazon.

After years of studying Amazon’s business practices, Mitchell, of ILSR, thinks the best solution is arguably the most drastic.

“Policymakers could regulate Amazon’s fees — basically accept it as a regulated shopping monopoly, like a utility,” she said. “But I think a much better, more market-oriented approach is to break it up by splitting Amazon’s major divisions into stand-alone companies.”

Source: Amazon funds its empire by squeezing its marketplace sellers

 

More contents:

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Bat Viruses? Puppy Experiments? Fact-Checking Critics’ Latest Claims About Dr. Fauci.

Dr. Anthony Fauci is facing a storm of new conservative-led criticism that the National Institute of Allergy and Infectious Diseases — which he’s led for decades — funded everything from risky coronavirus research in China to unnecessary experiments on dogs; here, we break down the outrageous and not-so-outrageous new claims, and the evidence supporting them.

Key Facts

Claim: House Republicans claim a letter sent to them by the National Institutes of Health last week “confirmed” a 2018-2019 study in the Chinese city of Wuhan involved gain-of-function research, a contentious method of studying viruses by enhancing them — despite denials from Fauci that the NIH funded gain-of-function research in Wuhan.

Context: The NIH letter said mice unexpectedly “became sicker” during an experiment in Wuhan involving bat coronaviruses whose spike proteins were replaced — but it didn’t mention gain-of-function research, and Fauci and NIH Director Dr. Francis Collins argued last week the study didn’t meet the definition of gain-of-function, though several experts still told the New York Times and The Intercept this kind of research is risky.

Claim: Rep. James Comer (R-Ky.) told Fox News last week the NIH letter “proves all along that this virus was started in the Wuhan lab,” tying it to months of insinuations from Republicans that Covid-19 began after a virus leaked from a lab.

Context: These bat viruses “could not possibly have caused the COVID-19 pandemic” because they’re too genetically distinct, the NIH says, an argument seconded by many scientists and the EcoHealth Alliance, the nonprofit recipient of the Wuhan NIH grant.

Claim: Separately, in recent weeks, lawmakers like Rep. Nancy Mace (R-S.C.) have chastised NIAID for funding “barbaric and gruesome” experiments on dogs, including studies allegedly exposing dogs to insects, cutting their vocal cords or euthanizing them.

Context: NIAID defended its dog experiments in a statement: It said researchers need to follow federal guidelines on humane treatment of animals, and dogs are sometimes given vocal cordectomies “humanely under anesthesia” to cut down on hazardous noise.

Claim: News outlets and advocates have spread photos of beagles from Tunisia whose heads were put in mesh cages filled with flies, part of a parasitic disease study that initially cited NIH funding when it was published in PLOS Neglected Tropical Diseases.

Context: NIAID told Forbes it actually “did not support this specific research,” and PLOS spokesperson David Knutson says the journal is issuing a correction to clarify the study’s funding was “erroneously attributed to the US National Institutes of Health.”

Chief Critic

Fauci has served as the director of NIAID — part of the NIH — since 1984, but he earned mainstream fame after Covid-19 emerged, and his support for public health measures like mask-wearing and social distancing has driven criticism from conservatives. In recent months, he’s also clashed with Sen. Rand Paul (R-Ky.) over the NIH’s ties to bat virus research in Wuhan. Most notably, during an explosive July hearing, Paul accused Fauci of lying about whether this work involved gain-of-function methods, and Fauci insisted the NIH hasn’t funded gain-of-function research in Wuhan.

Key Background

Gain-of-function research is ill-defined, and opinions on the practice vary widely. Some scientists view it as a useful way of predicting viruses’ future trajectory, but critics warn modifying viruses could pose a biosafety risk. The NIH paused gain-of-function studies for certain viruses in 2014, and three years later, it reopened this research but added extra scrutiny for any experiments that could enhance pathogens’ effectiveness against humans. However, the Wuhan research — which studied various coronaviruses — wasn’t subject to these additional rules because the bat viruses under study weren’t known to infect people, the NIH claimed in last week’s letter to Republicans on the House Oversight Committee.

Surprising Fact

The NIH’s letter to Republicans also said EcoHealth Alliance was required to report any growth in disease for its experiment beyond a certain threshold, but it “failed to report this finding right away.” NIH’s leader Collins told the Washington Post the group “messed up here,” though its findings weren’t necessarily dire. But EcoHealth spokesperson Robert Kessler told Forbes it believes these claims were a “misconception about the grant’s reporting requirements,” saying the group reported the data in question to the NIH in 2018.

What We Don’t Know

Some of this acrimony is tied to uncertainty about the pandemic’s origin. Fauci and many experts think the virus most likely jumped from animals to humans naturally and argue there’s insufficient evidence to suggest the virus escaped from a laboratory, but other scientists say an accidental leak from a lab is still a plausible theory, and Fauci and the Biden administration say they haven’t ruled out this possibility yet.

Still, even if the virus leaked from a lab, the NIH says the viruses studied in the Wuhan lab with EcoHealth Alliance’s participation were “very far distant from SARS-CoV-2,” the virus linked to Covid-19. Likewise, Kessler said none of those viruses “bear a close enough resemblance to the virus that causes COVID-19 to have played any role in its emergence.” And in his July exchange with Fauci, Paul said he isn’t necessarily alleging the NIH’s research specifically caused Covid-19.

Tangent

Some conservative pundits tied their anger over NIH-funded dog research to broader complaints about Fauci, but dog experiments have been controversial for years. NIAID says its rules around animal testing aim to “ensure the smallest possible number of subjects and the greatest commitment to their welfare,” and argues this research is useful. One study blasted by activists used dogs as an “appropriate model” to test a vaccine for a brutal mosquito-borne parasite, NIAID told Forbes, and another study in Tunisia — which it said is separate from the experiment that placed dogs’ heads in cages — investigated a vaccine for a common parasite by letting dogs roam in an “enclosed open space” during sandfly season.

However, advocates cast this research as cruel and unnecessary. Justin Goodman from the White Coat Waste Project, an anti-animal experimentation group often critical of Fauci, told Forbes in a statement the group’s concerns are “not about photos in Tunisia — or any one beagle lab. It’s about Dr. Fauci’s widespread and long pattern of wasteful and punishing puppy abuse.”

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I am a breaking news reporter at Forbes. I previously covered local news for the Boston Guardian, and I graduated from Tufts University in 2019. You can contact me at jwalsh@forbes.com or on Twitter at @joewalshiv

Source: Bat Viruses? Puppy Experiments? Fact-Checking Critics’ Latest Claims About Dr. Fauci.

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