intervention – Technology Liberation Front https://techliberation.com Keeping politicians' hands off the Net & everything else related to technology Mon, 10 Apr 2023 14:17:32 +0000 en-US hourly 1 6772528 Lavoie’s Lessons for Industrial Policy Planners https://techliberation.com/2021/11/09/lavoies-lessons-for-industrial-policy-planners/ https://techliberation.com/2021/11/09/lavoies-lessons-for-industrial-policy-planners/#comments Tue, 09 Nov 2021 15:55:23 +0000 https://techliberation.com/?p=76917

Discourse magazine recently published my essay on what “Industrial Policy Advocates Should Learn from Don Lavoie.” With industrial policy enjoying a major revival in the the U.S. — with several major federal proposals are pending or already set to go into effect — I argue that Lavoie’s work is worth revisiting, especially as this weekend was the 20th anniversary of his untimely passing. Jump over to Discourse to read the entire thing.

But one thing I wanted to just briefly highlight here is the useful tool Lavoie created that helped us think about the “planning spectrum,” or the range of different industrial policy planning motivations and proposals. On one axis, he plotted “futurist” versus “preservationist” advocates and proposals, with the futurists wanting to invest in new skills and technologies, while the preservationists seek to prop up existing sectors. On the other axis, he contrasted “left-wing or pro-labor” and “right-wing or pro-business” advocates and proposals.

Lavoie used this tool to help highlight the remarkable intellectual schizophrenia among industrial policy planners, who all claimed to have the One Big Plan to save the economy. The problem was, Lavoie noted, all their plans differed greatly. For example, he did a deep dive into the work of Robert Reich and Felix Rohatyn, who were both outspoken industrial policy advocates during the 80s. Reich as affiliated with the Harvard School of Government at that time, and Rohatyn was a well-known Wall Street financier. The industrial policy proposals set forth by Reich and Rohatyn received enormous media and academic attention at the time, yet no one except Lavoie seriously explored the many ways in which their proposals differed so fundamentally. Rohatyn was slotted on the lower right quadrant because of his desire to prop up old sectors and ensure the health of various private businesses. Reich fell into the upper quadrant of being more of futurist in his desire to have the government promote newer skills, sectors, and technologies.

After identifying the many inconsistencies among these planners and their proposed schemes, Lavoie pointed out that these differences raised some obvious questions: Whose plan are we supposed to follow when proposed plans conflict? And how much stock should we place in the wisdom of industrial policy when the leading advocates cannot even agree on what sectors and technologies are worth preserving or promoting? It was a simply but powerful insight that should led us to calling into question anyone who tries to pretend that they have all the answers when it comes to industrial policy planning. And, as I argue in my new essay, this insight helps us identify the continuing intellectual schizophrenia among industrial policy planners and schemes today. If you jump over to my longer piece, you’ll see my breakdown of all this, but it’s plotted here:

In the end, I conclude that:

The limitations of industrial policy exist regardless of the policymaker’s intentions. There are no “good guys” versus “bad guys” when it comes to industrial policy efforts; there are just many people with many different technocratic plans, all of which are constrained by limited knowledge and resources.

Moreover, Lavoie most important piece of relevant advice is the simple adage that, if you find yourself in a hole, it is wise to stop digging. Constantly doubling down on planning efforts is not going to help governments escape the problems created by their earlier interventions. Unfortunately, this is exactly what many industrial policy advocates do: They insist that America already has an industrial policy, but that it lacks the sort of conscious design or coherent form or direction they desire. But that is the typical sort of hubris and folly we’ve always heard from planners. They always think there’s a proverbial “better path” out there and want us to imagine that they can lead us down it with wiser planning that avoids all the problems of all those past failed planning efforts.

As Lavoie taught us long ago, we’d be wise to reject their various schemes and recommendations. “In light of the inherent deficiencies of central planning, it might be argued that the U.S. should instead try to reduce current government interference with the competitive process to the absolute minimum consistent with other political goals,” he concluded. It remains wise advice for today’s policymakers.

Additional Reading:

]]> https://techliberation.com/2021/11/09/lavoies-lessons-for-industrial-policy-planners/feed/ 2 76917 Skeptical Takes on Expansive Industrial Policy Efforts https://techliberation.com/2021/03/15/skeptical-takes-on-expansive-industrial-policy-efforts/ https://techliberation.com/2021/03/15/skeptical-takes-on-expansive-industrial-policy-efforts/#comments Mon, 15 Mar 2021 17:09:11 +0000 https://techliberation.com/?p=76845

[Last updated 3/25/22]

Industrial Policy is a red-hot topic once again with many policymakers and pundits of different ideological leanings lining up to support ambitious new state planning for various sectors — especially 5G, artificial intelligence, and semiconductors. A remarkably bipartisan array of people and organizations are advocating for government to flex its muscle and begin directing more spending and decision-making in various technological areas. They all suggest some sort of big plan is needed, and it is not uncommon for these industrial policy advocates to suggest that hundreds of billions will need to be spent in pursuit of those plans.

Others disagree, however, and I’ll be using this post to catalog some of their concerns on an ongoing basis. Some of the criticisms listed here are portions of longer essays, many of which highlight other types of steps that governments can take to spur innovative activities. Industrial policy is an amorphous term with many definitions of a broad spectrum of possible proposals. Almost everyone believes in  some form of industrial policy if you define the term broadly enough. But, as I argued in a September 2020 essay “On Defining ‘Industrial Policy‘,” I believe it is important to narrow the focus of the term such that we can continue to use the term in a rational way. Toward that end, I believe a proper understanding of industrial policy refers to targeted and directed efforts to plan for specific future industrial outputs and outcomes.

The collection of essays below is merely an attempt to highlight some of the general concerns about the most ambitious calls for expansive industrial policy, many of which harken back to debates I was covering in the late 1980s and early 1990s, when I first started a career in policy analysis. During that time, Japan and South Korea were the primary countries of concern cited by industrial policy advocates. Today, it is China’s growing economic standing that is fueling calls for ambitious state-led targeted investments in “strategic” sectors and technologies. To a lesser extent, grandiose European industrial policy proposals are also prompting new US counter-proposals.

All this activity is what has given rise to many of the critiques listed below. If you have suggestions for other essays I might add to this list, please feel free to pass them along. FYI: There’s no particular order here.

Scott Lincicome and Huan Zhu, “Questioning Industrial Policy: Why Government Manufacturing Plans Are Ineffective and Unnecessary,” Cato Institute Working Paper, June 16, 2021.

[I]ndustrial policy – properly defined – has an extensive and underwhelming history in the United States, featuring high costs (seen and unseen), failed objectives, and political manipulation. Surely, not every U.S. industrial policy effort has ended in disaster, but facts here and abroad argue strongly against new government efforts to boost “critical” industries and workers and thereby fix alleged market failures. Such efforts warrant intense skepticism – skepticism that today is unfortunately in short supply.

Adam Thierer, “Industrial Policy as Casino Economics,” The Hill, July 12, 2021.

While some government investments will always be necessary, policymakers engaging in casino economics means bad industrial policy bets and taxpayer money squandered on risky ventures best made by private actors. We need to keep Uncle Sam’s gambling habits in check.

Adam Thierer, “Thoughts on the America COMPETES Act: The Most Corporatist & Wasteful Industrial Policy Ever,” Technology Liberation Front, January 26, 2022.

As far as industrial policy measures go, the COMPETES Act is one of the most ambitious and expensive central planning efforts in American history. It represents the triumph of top-down, corporatist, techno-mercantilist thinking over a more sensible innovation policy rooted in bottom-up competition, entrepreneurialism, private investment, and free trade.

Adam Thierer & Connor Haaland, “Does the US Need a More Targeted Industrial Policy for AI & High-Tech?” Mercatus Center at George Mason University, Special Study, November 2021.

This paper considers how both the recent history of high-tech industrial policy efforts at the national and international level—as well as some state and local economic development efforts in the United States—might better inform the wisdom of proposed efforts for AI or other high-tech sectors. That history is spotted with some limited successes alongside a long string of costly failures. We explore the reasons for those failures and recommend that the US refocus on the policy prerequisites that helped give rise to the computing and internet revolutions: a more generalized approach to economic development rooted in light-touch regulation and taxation of emerging technology.

Samuel Gregg, “Can America Build A Broad-Based Economy?”  Law & Liberty, March 1, 2022

Of course, if a government decides to put enough money and resources behind a given industrial policy, it will likely produce some results. Yet the same is true of the gambler. If she stays in the casino long enough and spends enough money, she will win a few hands of cards. But the odds are that she will also lose a great deal of money, especially if she is as inept a gambler as the government is maladroit at identifying industry trends or entrepreneurial opportunities. Moreover, just as a compulsive gambler’s behavior will have numerous negative effects on her family’s well-being, so too does industrial policy risk inflicting wider damage upon a nation’s economy and political system. The harms range from gross misallocations of resources to the rampant cronyism and rent-seeking that seems inseparable from industrial policy (which, I again note, its advocates studiously avoid discussing), to name just a few.

Phil Gramm & Mike Solon, “Peace Through Strength Requires Economic Freedom,” Wall Street Journal, March 1, 2022.

The America Competes Act is the House’s effort to outdo the Chinese Communist Party’s latest five-year plan. The 2,900-page bill would make an old Soviet commissar blush.  [. . . ] America’s success in the world economy has never depended on industrial policy or government subsidies. It has come from the relative absence of government planning and subsidies. This is hardly news. The U.S. government provided support for the efforts of Samuel Langley, the greatest aviation expert of the 1890s, in his effort to make America first in powered flight. His manned Aerodrome flopped into the Potomac River. It was the Wright brothers, two unsubsidized but determined bicycle makers from Dayton, Ohio, who flew at Kitty Hawk, N.C., and changed the world.

Scott Lincicome, “Moving Fast and Breaking Things,” Capitolism, February 2, 2022.

Adam Thierer, “The Coming Industrial Policy Hangover,”  The Hill, February 16, 2022.

In the rush to pass legislation, we’ve barely heard a peep about the $250-$350 billion price tag. This follows a massive splurge of recent government borrowing, which led to the U.S. national debt hitting another lamentable new record: $30 trillion. China already owns over $1 trillion of that debt, making one wonder if we’re really countering China by adopting a massive, new and unfunded industrial policy that they will end up financing indirectly.

Podcast: “What’s Wrong with Industrial Policy,” Hold These Truths with Rep. Dan Crenshaw, February 16, 2022.

Tad DeHaven and Adam Thierer, “ The Military-Industrial Complex Offers a Cautionary Tale for Industrial Policy Planning,” Discourse, March 25, 2022.

Wayne Crews, “What To Do Instead Of The America COMPETES Act,” Forbes, February 2, 2022.

All this spending and expansion of the federal government, atop which our leaders would lay the America COMPETES Act and doubtless its own accompanying guidebook, has massive, ignored regulatory effects. Trillions in government spending (”investment”) have altered and will alter the entire trajectory and competitive environment of industries engaged in large-scale enterprises and transactions. This removes vast swaths of business activity from free competitive enterprise altogether, and creates displacements and distortions such that the restoration of free enterprise becomes a near-impossible disentanglement. The result is, after 100 years of big government and seduction of and fusion with big business, the greatest endeavors—from infrastructure to artificial intelligence, from smart cities to space—now consist of “partnerships” with governments rather than free enterprise, at scales and at costs so gigantic they can only be ignored.

Adam Thierer, “‘Japan Inc.’ and Other Tales of Industrial Policy Apocalypse,” Discourse, June 28, 2021.

Perhaps the most ironic indictment of industrial policy punditry lies in the way all the earlier books and essays about Japanese planning not only failed to forecast the many flops associated with it, but also did not foresee China as a potential future economic juggernaut. [. . .] What might that tell us about the ability of experts to predict the future course of countries and economies?

Adam Thierer, “Can Government Reproduce Silicon Valley Everywhere?”  Technology Liberation Front, September 12, 2021.

government efforts to artificially try to create regional innovation hubs in a top-down, technocratic fashion will almost certainly persist. As they do, some will argue that this time will be different! Perhaps, but it is more likely that the past is prologue; these new hubs will likely cause federal politicians to jockey for position to have their regions named one of the winners and get a big cut of all the new high-tech pork being served up by Washington.

Weifeng Zhong, “Beijing Can’t Make Sense of Biden’s China Strategy. Can Biden?” Washington Examiner, July 01, 2021.

America is not China, and it would be a fatal mistake to equate competing with China with imitating what China does. Doing so would risk the advantageous U.S. position as the world’s chief innovator, whose ideas are turned into products by vibrant private sectors both domestically and internationally.

Mike Watson, “Industrial Policy in the Real World,” National Affairs, Summer 2021.

Given the nature of industrial policymaking in the United States, there’s little reason to believe future attempts at industrial planning will result in a more coherent, rational, or strategic allocation of resources than they have in the past. [. . .] In short, industrial policy in the United States cannot be steered by a small group of enlightened individuals, because a small group of enlightened individuals will never be at the helm. Indeed, in some sense, there is no single “helm” to speak of.
 

Samuel Gregg, “Industrial Policy Mythology Confronts Economic Reality,” Law & Liberty, September 3, 2021.

If prizes in policy debates were given out for persistence, those advocating for more widespread use of industrial policy in America would be first in line. No matter how many times it is pointed out that they don’t understand the nature and workings of comparative advantage; or avoid acknowledging how industrial policy fosters rampant cronyism and corruption; or highlight what they consider examples of countries in which industrial policy has been employed successfully (only to have it demonstrated that it didn’t quite work out the way they suggested), they don’t give up.

Elizabeth Nolan Brown, “If This Is How America COMPETES, We’re Going to Lose,” Reason, January 26, 2022.

the bill can’t simply address one main issue or a few critical needs. Instead, it tries to insert the government into every aspect of all sorts of industries and markets and pretend that bureaucrats can solve complex social and cultural issues.

Chang-Tai Hsieh, “Countering Chinese Industrial Policy Is Counterproductive,” Project Syndicate, September 15, 2021.

US political leaders have long tried to counter Chinese industrial policy. And now they seem to have decided that the best way to do that is to emulate it. But their agenda betrays a profound lack of understanding of the unique challenge posed by China’s coupling of an authoritarian political regime with a dynamic market economy.

Adam Thierer, “Industrial Policy Advocates Should Learn from Don Lavoie,” Discourse, November 5, 2021.

“In light of the inherent deficiencies of central planning,” Lavoie said, “it might be argued that the U.S. should instead try to reduce current government interference with the competitive process to the absolute minimum consistent with other political goals.” It remains wise advice for today’s policymakers.
Image

Anne O. Krueger, “America’s Muddled Industrial Policy,” CGTN, June 25, 2021.

Governments have a poor track record of identifying “winners” – be it a company or a category of technology – whereas private companies have proved better at transforming new discoveries into new products or cost savings. That is why the U.S. state traditionally has stuck to funding basic research.

Eric Boehm, “Massive Subsidies Won’t Solve the Semiconductor Supply Chain Crisis,” Reason, January 28, 2022.

Tracy C. Miller, “The Case for Limiting Government Semiconductor Subsidies,” The Hill, June 26, 2021.

Without the subsidies, firms would be more cautious about building or expanding foundries. If long-term production capacity is truly insufficient, high prices and anticipated profits give firms the right incentives to build or expand and satisfy demand at cost-covering prices.

Scott Lincicome, “The ‘Endless Frontier’ and American Industrial Policy,” Cato Institute Blog, May 26, 2021.

U.S. industrial policy has a long history of struggling to overcome political pressures, just as public choice predicts, and the EFA is no different. None of this means that all legislating is bad, or that politicians don’t at least occasionally vote in the national interest. Instead, the public choice framework simply adds another hurdle—along with things like the “knowledge problem,” seen and unseen costs, and misaligned incentives—to designing and implementing commercial policies specifically intended to beat the admittedly messy and imperfect situation that the market generates. It’s imperative that we understand these risks before supporting policies that, while they might look good on paper, could easily morph into a counterproductive boondoggle—one we’ve seen countless times with respect to U.S. industrial policy.

Daniel W. Drezner, “Is the United States capable of industrial policy in 2021?” Washington Post, June 14, 2021.

To believe that the United States can pursue a high-caliber industrial policy, however, requires assuming a more competent state than I have seen in the past decade.

Douglas Holtz-Eakin, “The Nicest Thing I Can Write About Supply Chain Policy,” The Daily Dish, June 10, 2021.

Nevertheless, the Senate just passed a provision for $50 billion to subsidize chip fabrication – something the president had requested – and the House will doubtlessly concur. That might seem like an industry victory, but wait until it realizes that the administration will assume it gives it the right to insist on union jobs, micromanage the design of chips, and dictate the pricing and distribution of the products. Good luck with that. As the definitive volume on policy analysis (Benjamin Franklin’s Poor Richard’s Almanack) put it, “He that lieth down with dogs shall rise up with fleas.”

Lipton Matthews, “Industrial Policy—a.k.a. Central Planning—Won’t Make America Great,” Mises Wire, November 5, 2021.

Although industrial policy is in vogue, the evidence suggests that it is not necessary for long-term development. Moreover, despite the popularity of industrial policy in China, America remains the world’s economic power, and by following China, it may lose this vaunted position.

Richard Beason, “Japanese Industrial Policy: An Economic Assessment,” National Foundation for American Policy, November 2021.

There is no evidence to support the claim that Japanese industrial policy during the 1955-1990 period enhanced growth rates by sector, industries with economies of scale (greater efficiency when produced in increased amounts), productivity growth or “competitiveness.” The reality of the political process and government spending priorities makes it very difficult for such policies to be effective. Furthermore, even if political pressures had not intervened, it seems questionable to suggest that government policymakers would be better than actual market participants in determining the most efficient allocation of resources to produce the best economic outcomes.

Douglas Irwin, “ Memo to the Biden administration on how to rethink industrial policy,” Peterson Institute for International Economics, October 2020.

The challenge for policymakers is to identify such industries without succumbing to the notion that every industry is vital to some public objective. For example, the goal of “economic security” is so broadly defined and open-ended that virtually every domestic producer could claim the need for government support on that basis. The risk is that ill-conceived government programs will encourage corrupt behavior in which industries benefit themselves without contributing to national welfare.

Jim Pethokoukis, “Will Biden’s embrace of industrial policy pay off?” AEI Blog, January 15, 2021.

The history of such efforts in advanced capitalist economies gives ample reason for skepticism about the effectiveness of such top-down government planning, from Japanese economic stagnation to the now-mothballed Concorde supersonic jet to France’s failed attempt to create a thriving tech sector. The Internet might seem like the exception that negates the rule, but what turned out to be a successful partnership of government and entrepreneurs didn’t arise out of some master plan from Washington. And what do even the smartest plans look like when filtered through the dodgy quality of American governance? Maybe as an excuse for cronyism and protectionism.

Adam Thierer & Connor Haaland, “Should the U.S. Copy China’s Industrial Policy?” Discourse, March 11, 2021.

America needs to embrace its already vibrant venture capital market, the benefits of basic science and prize competitions, and a light-touch regulatory approach instead of gambling taxpayer dollars on grandiose industrial policy schemes that would likely become boondoggles.

Connor Haaland & Adam Thierer, “Can European-Style Industrial Policies Create Tech Supremacy?” Discourse, February 11, 2021.

Thus far, however, the Europeans don’t have much to show for their attempts to produce home-grown tech champions. Despite highly targeted and expensive efforts to foster a domestic tech base, the EU has instead generated a string of industrial policy failures that should serve as a cautionary tale for U.S. pundits and policymakers, who seem increasingly open to more government-steered innovation efforts.

Phil Levy & Christine McDaniel, “ Does the U.S. Need a Vigorous Industrial Policy?” Discourse, February 16, 2021.

we are certainly hearing new enthusiasm these days about industrial policy. It seems to have proponents or converts on both sides of the aisle. This either means that a new consensus has emerged, or it means that the term is being used so loosely that it has lost its original meaning. I’ll go with the latter; it now means different things to different people.

Wall Street Journal columnist Greg Ip discussing why “ The traditional skepticism toward industrial policy is well deserved.”

The traditional skepticism toward industrial policy is well deserved. Once Washington starts writing checks for semiconductors, other industries may get in line with the outcome determined more by political clout than economic merit. As in shipbuilding, the targeted companies may end up in perpetual need of federal protection and unable to compete internationally

David Ignatius, “The U.S. is quietly mobilizing its economy against China,” Washington Post, March 4, 2021.

The industrial policy the AI commission recommends could unlock talent and innovation. But if officials aren’t careful, government intervention could also afflict our best companies with the dead weight and dysfunction of our broken political system. We need government to spawn brainpower, not bureaucracy.

Veronique de Rugy, “Support for Industrial Policy is Growing,” AIER, January 18, 2020.

Looking at the federal government today tells me that the problems surrounding R&D programs in the past continue today, and will continue tomorrow, because they are simply a consequence of the normal functioning of government. It is hard to wish these problems away, even in the face of the private sector’s “imperfections.” Those arguing for more funding in R&D should proceed with caution.
This bill is proposing to give money with risk-averse restrictions to a risk-averse organization (the NSF) to be dispersed among other risk-averse organizations (Universities) into a system with increasingly risk-averse incentives. Note that I’m not saying “it’s all fubar’d lets burn it to the ground!” but I am suggesting that instead of slamming on the accelerator, we should be asking “what would a tune-up and an oil change look like instead?”

Ryan Bourne, “Do Oren Cass’s Justifications for Industrial Policy Stack Up?”  Cato Commentary, August 15, 2019.

Oren Cass asserts that markets cannot generally allocate resources efficiently by industry. Yet he provides no meaningful metrics to show this is the case, nor shows why his policies would deliver better outcomes. His two main claims about the benefits of a manufacturing sector — “stable employment” and “strong productivity growth” — are directly contradictory. A plethora of evidence suggests as countries’ get richer due to automation and technological improvements, they demand relatively more services, and so the industrial sector declines in employment terms.
Scott Lincicome, “ Manufactured Crisis: ‘Deindustrialization, Free Markets, and National Security,” Cato Policy Analysis No. 907, January 27, 2021.
This skepticism—mostly absent from Washington—is indeed warranted: analyses of the U.S. manufacturing sector and the relationship between trade and national security, as well as the United States’ long and checkered history of security‐​related protectionism, undermine the theoretical justifications for imposing protectionism and industrial policy in the name of national defense. Instead, open trade, freer markets, and global interdependence will in almost all cases produce better outcomes in terms of national security and, most importantly, preventing wars and other forms of armed conflict.
Matthew Lau, “Trudeau government’s ‘industrial policy’ creates all the wrong incentives,” Toronto Sun, March 16, 2021.
]]> https://techliberation.com/2021/03/15/skeptical-takes-on-expansive-industrial-policy-efforts/feed/ 4 76845 What is “Optimal Interoperability”? A Review of Palfrey & Gasser’s “Interop” https://techliberation.com/2012/06/11/what-is-%e2%80%9coptimal-interoperability%e2%80%9d-a-review-of-palfrey-gasser%e2%80%99s-%e2%80%9cinterop%e2%80%9d/ https://techliberation.com/2012/06/11/what-is-%e2%80%9coptimal-interoperability%e2%80%9d-a-review-of-palfrey-gasser%e2%80%99s-%e2%80%9cinterop%e2%80%9d/#comments Mon, 11 Jun 2012 17:36:47 +0000 http://techliberation.com/?p=41384

I’m pretty rough on all the Internet and info-tech policy books that I review. There are two reasons for that. First, the vast majority of tech policy books being written today should never have been books in the first place. Most of them would have worked just fine as long-form (magazine-length) essays. Too many authors stretch a promising thesis into a long-winded, highly repetitive narrative just to say they’ve written an entire book about a subject. Second, many info-tech policy books are poorly written or poorly argued. I’m not going to name names, but I am frequently unimpressed by the quality of many books being published today about digital technology and online policy issues.

The books of Harvard University cyberlaw scholars John Palfrey and Urs Gasser offer a welcome break from this mold. Their recent books, Born Digital: Understanding the First Generation of Digital Natives, and Interop: The Promise and Perils of Highly Interconnected Systems, are engaging and extremely well-written books that deserve to be books. There’s no wasted space or mindless filler. It’s all substantive and it’s all interesting. I encourage aspiring tech policy authors to examine their works for a model of how a book should be done.

In a 2008 review, I heaped praise on Born Digital and declared that this “fine early history of this generation serves as a starting point for any conversation about how to mentor the children of the Web.” I still recommend highly to others today. I’m going to be a bit more critical of their new book, Interop, but I assure you that it is a text you absolutely must have on your shelf if you follow digital policy debates. It’s a supremely balanced treatment of a complicated and sometimes quite contentious set of information policy issues.

In the end, however, I am concerned about the open-ended nature of the standard that Palfrey and Gasser develop to determine when government should intervene to manage or mandate interoperability between or among information systems. I’ll push back against their amorphous theory of “optimal interoperability” and offer an alternative framework that suggests patience, humility, and openness to ongoing marketplace experimentation as the primary public policy virtues that lawmakers should instead embrace.

Interop is Important, but Often Difficult & Filled with Trade-Offs

Palfrey and Gasser begin by noting that “there is no single, agreed-upon definition of interoperability” and that “there are even many views about what interop is and how it should be achieved” (p. 5). They set out to change that by developing “a normative theory identifying what we want out of all this interconnectivity” that the information age has brought us (p. 3).

Generally speaking, Palfrey and Gasser believe increased interoperability — especially among information networks and systems — is a good thing because it “provides consumers greater choice and autonomy” (p. 57), “is generally good for competition and innovation” (p. 90), and “can lead to systemic efficiencies” (p. 129).

But they wisely acknowledge that there are trade-offs, too, noting that “this growing level of interconnectedness comes at an increasingly high price” (p. 2). Whether we are talking about privacy, security, consumer choice, the state of competition, or anything else, Palfrey and Gasser argue that “the problems of too much interconnectivity present enormous challenges both for organizations and for society at large” (p. 2). Their chapter and privacy and security offers many examples, but one need only look around at their own digital existence to realize the truth of this paradox. The more interconnected our information systems become, and the more intertwined our social and economic lives become with those systems, the greater the possibility of spam, viruses, data breaches, and various types of privacy or reputational problems. Interoperability giveth and it taketh away.

When Does “the Public Interest” Demand Interoperability Regulation?

So, how do we know when increased interoperability is good for us or society? How do we strike a reasonable balance? And, most controversially, when should government intervene to tip the balance in one direction or another?

Palfrey and Gasser return to these questions repeatedly throughout the book but admit that their answers will be dissatisfying since “there is no single form or optimal amount of interoperability that will suit every circumstance” (p. 76). Thus, “most of the specifics of how to bring interop about [must] be determined on a case-by-case basis (p. 17). They elaborate:

That can feel unsatisfying. But it is an essential truth: the most interesting interop problems relate to society’s most complex and most fundamental systems. Their answers are never simple to come by, nor are they easy to implement. This characteristic of interop theory is a feature, not a bug. … The price to be paid for striving for a universal principle at the level of theory is that such a theory is full of nuances when it comes to application and practice (p. 17-18).

Fair enough. Yet, Palfrey and Gasser also make it clear they want government(s) to play an active role in ensuring optimal interoperability. They say they favor “blended approaches that draw upon the comparative advantages of the private and public sector” (p. 161), but they argue that government should feel free to tip or nudge interoperability determinations in superior directions. “If deployed with skill,” they argue, “the law can play a central role in ensuring that we get as close as possible to optimal levels of interoperability in complex systems” (p. 88).

That phrase — “optimal level of interoperability” — pops up repeatedly throughout the book. So, too, does the phrase “the public interest.” Palfrey and Gasser argue that governments must look out for “the public interest” and “optimal interoperability” since “market forces do not automatically lead to appropriate standards or to the adoption of the best available technology” (p. 167). Here they introduce two additional amorphous values that complicate the debate: “appropriate standards” and “best available technology.”

The fundamental problem this “public interest” approach to interoperability regulation is that it is no better than the “I-know-it-when-I-see-it” standard we sometimes at work in the realm of speech regulation. It’s an empty vessel, and if it is the lodestar by which policymakers make determinations about the optimal level of interoperability, then it leaves markets, innovators, and consumers subject to the arbitrary whims of what a handful of politicians or regulators think constitutes “optimal interoperability,” “appropriate standards,” and “best available technology.”

On the Limits of Knowledge

Palfrey and Gasser’s framework feels more than just “unsatisfying” in this regard; it feels downright insufficient. That’s because it is missing a major variable: the extent to which state actors are able to adequately define those terms or accurately forecast the future needs of markets or citizen-consumers.

Surprisingly, Palfrey and Gasser don’t really spend much time discussing the specific remedies the state might impose to achieve optimal interoperability. I would have liked to have seen them develop a matrix of interop options and then outline the strengths and weaknesses of each. But even absent a more detailed discussion of possible regulatory remedies, I would have settled for more concrete answers to the following questions: Why are we to assume that regulators possess the requisite knowledge needed to know when it makes sense to foreclose ongoing marketplace experimentation? And why should we trust that, by substituting their own will for that of countless other actors in the information technology marketplace, we will be left better off?

The closest Palfrey and Gasser get to defining a firm standard for when and why such state intervention is warranted comes on page 173 when they are discussing the need for the state to establish sound reasons for intervention. They argue:

The objective should not be interoperability per se but, rather, one or more public policy goal to which interoperability can lead. The goals that usually make sense are innovation and competition, but other objectives might include consumer choice, ease of use of a technology or system, diversity, and so forth (p. 173).

This is a bit better, but it still doesn’t fully grapple with the cost side of the cost-benefit calculus for intervention. Palfrey and Gasser are willing to at least acknowledge some of those problems when they remark that “the state is rarely in a position to call a winner among competing technologies” (p. 174). Moreover,

Lawmakers need to keep in view the limits of their own effectiveness when it comes to accomplishing optimal levels of interoperability. Case studies of government intervention, especially where complex information technologies are involved, show that states tend to be ill suited to determine on their own what specific technology will be the best option for the future (p. 175)

Quite right! Yet, that insight does not seem to influence their calls elsewhere in the book for regulatory activism. That’s a shame since the admonition about policymakers recognizing the “limits of their own effectiveness” should be able to help us devise some limiting principles regarding the state’s role.

Toward an Alternative Theory: Experimental, Evolutionary Interoperability

Allow me to offer a different theory of optimal interoperability that flows from these previous insights. It’s based on a more dynamic view of markets and the central importance of experimentation in the face of uncertainty. Let me just go ahead and articulate the core principles of what I will refer to as  “experimental, evolutionary interoperability theory.” Then I’ll explain it in more detail

  • Experimental, evolutionary interoperability : The theory that ongoing marketplace experimentation with technical standards, modes of information production and dissemination, and interoperable information systems, is almost always preferable to the artificial foreclosure of this dynamic process through state action. The former allows for better learning and coping mechanisms to develop while also incentivizing the spontaneous, natural evolution of the market and market responses. The latter (regulatory foreclosure of experimentation) limits that potential.

Palfrey and Gasser would label this a “laissez-faire” theory of interoperability and oppose it since they believe “a pure laissez-faire approach to interop rarely works out well” (p. 160). But they are wrong, at least to the extent they include the sweeping modifier “rarely” to describe this model’s effectiveness. In reality, the vast majority of interoperability that occurs into today’s information economy happens in a completely natural, evolutionary fashion without any significant state intervention whatsoever. In countless small and big ways alike, interconnection and interoperability happens every day throughout society. Yes, it is true that interoperability often happens against the backdrop of a legal system that allows court action to enforce certain rights or address perceived harms, but I would not classify that as a significant direct state intervention to tip or nudge interconnection decisions in one direction or another. And when interoperability doesn’t happen naturally, there are often good reasons it doesn’t and, even if there aren’t, non-interop spawns beneficial marketplace reactions and innovations.

Experimental, evolutionary interoperability theory flows out of Schumpeterian competition theory and the related field of evolutionary economics, but it is also heavily influenced by public choice theory (which stresses the limitations of romanticized theories of politics, planning, and “public interest” regulation). This alternative theory begins by accepting the simple fact that, as Austrian economist F.A. Hayek taught us, “progress by its very nature cannot be planned.” The wiser man, Hayek noted, “is very much aware that we do not know all the answers and that he is not sure that the answers he has are certainly the right ones or even that we can find all the answers.”

Ongoing experimentation with varying business models and modalities of social and economic production allows us to see what consumer choice and trial and error experimentation yields naturally over time. Ongoing experiments with flexible, voluntary interop standards and negotiations also allows us to determine which technological standards seem to benefit consumers in the short-term while also encouraging innovators to leap-frog existing standards and platforms when they become locked-in for too long or seem sub-optimal.

In the short-term, it is entirely possible that such voluntary, evolutionary interop experiments “fail” in various ways. That is often a good thing. Failures are how individuals and a society learn to cope with change and devise systems and solutions to accommodate technological change. As Samuel Beckett once counseled: “Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better.” Progress depends upon an embrace of this uncertainty and acceptance of a world of constant upheaval if we are to learn how to cope, adapt, and move forward.

In this model, technological innovation often springs from the quest for the prize of market power.  Palfrey and Gasser generally reject this Schumpeterian vision of dynamic competition, but they at least do a nice job of describing it:

firms may have a stronger incentive to be innovative when low levels of interoperability promise higher or even monopoly profits. This sort of competition… creates incentives for firms to come up with entirely new generations of technologies or business methods that are proprietary (p. 121).

They reject this approach based on (1) the mistaken notion that the quest of the prize of market power ends in the attainment and preservation of that market power; and (2) the belief that policymakers possess the ability to set us on a better course through wise interventions.

In a moment, I’ll prove why that is misguided by examining a few real-world cases studies. For now, however, let’s return to Palfrey & Gasser’s central operating principle and contrast it with the vision I’ve articulated here. Recall that they argue “it is important to maintain and facilitate diversity in the marketplace. We simply want systems to work together when we want them to and to not work together when we do not.” Again, there is no standard here if one is suggesting this as the principle by which to determine when state intervention is desirable . But if one is looking at that aspirational statement as a description of the natural order of things — namely, that we do indeed “want systems to work together when we want them to and to not work together when we do not” — then that is a perfectly sound principle for understanding why state intervention should be disfavored in all but the most extreme circumstances. To reiterate: We should not allow the state to foreclose interoperability experiments because (a) those experiments have value in and of themselves, and (b) state action is likely to have myriad unintended consequences and unforeseen costs that are not easily remedied or reversed.

There are moments in the book when Palfrey and Gasser appear somewhat sympathetic to the sort of alternative “evolutionary interop” theory I have articulated here. For example, they note that:

The web is a great equalizer for technology firms. As consumers, we have come to expect that everything will work together without incident or interruption. We think it bizarre when something in the digitally networked world does not mesh with something else, perceiving whatever it is to be broken, in need of repair. This high degree of expectation is a powerful driver of interoperability. Market players are increasingly responding to this consumer demand and making these invisible links work for their customers without any government intervention” (p. 28) [italics added]

You won’t be surprised to hear that I agree wholeheartedly! Moreover, what it really proves is that ongoing marketplace experimentation and the evolution of norms and standards generally solve interoperability problems as they develop. That doesn’t mean markets are perfectly competitive or always produce perfect interoperability. But, again, why should we believe state intervention will do a better job? And isn’t it possible that intervention could negatively counter those natural instincts that Palfrey and Gasser describe about how consumers and market actors interact to make those “invisible links” work out as nicely as they do today?

Interop, Competition & Innovation: Some Cases Studies of Evolutionary Interoperability in Action

To better explain experimental, evolutionary interop theory and how it plays out in the real-world, let’s examine the complex relationship between interoperability, competition, and innovation in the information economy through the prism of three case studies: AOL and instant messaging, video game consoles, and smartphones.

AOL

America Online’s (AOL) case study is probably the most profound example of Schumpeterian creative destruction rapidly eroding the market power of a once “dominant” digital giant. Not long ago, AOL was cast as the great villain of online openness and interoperability. In fact, when Lawrence Lessig penned his acclaimed book Code in the late 1990s, AOL was supposedly set to become the corporate enslaver of cyberspace.

For a time, it was easy to see why Lessig and others were worried. Twenty five million subscribers were willing to pay $20 per month to get a guided tour of AOL’s walled garden version of the Internet. Then AOL and media titan Time Warner announced a historic mega-merger that had some predicting the rise of “new totalitarianisms” and corporate “Big Brother.”

Fearing the worst, several conditions were placed on approval of the merger by both the Federal Trade Commission and the Federal Communication Commission. These included “open access” provisions that forced Time Warner to offer the competing ISP service from the second largest ISP at that time (Earthlink) before it made AOL’s service available across its largest cable divisions.  Another provision imposed by the FCC mandated interoperability of instant messaging systems based on the fear that AOL was poised to monopolize that emerging technology.

Palfrey and Gasser suggest this was a necessary and effective intervention. “The AOL IM case is another instance in which the role of government was key in establishing a more interoperable ecosystem” and they credit the FCC’s action with cutting AOL’s share of the IM (p. 68-9). That’s a huge stretch. The reality is that markets and technologies evolved around AOL’s walled garden and decimated whatever advantage the firm had in either the web portal business or instant messaging market.

First, despite all the hand-wringing and regulatory worry, AOL’s merger with Time Warner quickly went off the rails and AOL’s online “dominance” quickly evaporated. Looking back at the deal with TW, Fortune magazine senior editor Allan Sloan called it the “turkey of the decade” since it cost shareholders hundreds of billions. Second, AOL’s attempt to construct the largest walled garden ever also failed miserably as organic search and social networking flourished. Consumers showed they demanded more than the hand-held tour of cyberspace.

Finally, the hysteria about AOL’s threat to monopolize instant messaging and deny interoperability proved particularly unwarranted and also serves as a cautionary tale for those who argue regulation is needed to solve interoperability problems. At the time, well-heeled major competitors like Yahoo and Microsoft already had significant competing IM platforms, and others were rapidly developing. Interoperability among those systems was also spontaneously developing as consumers demanded greater flexibility among and within their communications systems. The development of Trillian, which allowed IM users to see all their various IM feeds at once, was an early precursor of what was to come. Today, anyone can download a free chat client like Digsby or Adium to manage multiple IM and email services from Yahoo!, Google, Facebook and just about anyone else, all within a single interface, essentially making it irrelevant which chat service friends use.

In a truly Schumpetrian sense, innovators came in and disrupted AOL’s plans to dominate instant messaging with innovative offerings that few critics or regulators would have believed possible just a decade ago. Progress happened, and nobody planned it from above. The FCC’s IM interoperability provision was quietly sunset less than three years after its inception since the evolution of technology and markets had rapidly eliminated the perceived problem. That mandate, as it turned out, wasn’t needed at all, and all it probably accomplished during its short life span was to hobble AOL’s ability to find a way to remain relevant in the increasingly competitive Web. 2.0 world.

Video game consoles

At first blush, the video game console wars might seem like the ideal case study for those who favor greater interoperability regulation. After all, in a static sense, why do we really need several competing video game platforms that prevent consumers from playing their games on more than one system? The lack of console interoperability also drives up development costs for game makers. Many of those developers would prefer to just code games for a single, universal gaming platform. Therefore, isn’t this the perfect excuse for state intervention to ensure “optimal interoperability”?

To the contrary, this is another example of why government should generally avoid intervening to try to achieve some sort of artificial optimal interoperability. This market has undergone continuous, turbulent change and witnessed remarkable pro-consumer innovation despite a lack of interoperability.

The video game console wars have raged since the late 1970s. The first generation of consoles was dominated Atari (2600), Mattel (Intellivision), and Coleco (ColecoVision). By the mid-1980s, the industry saw a new cast of characters displace the old players. Nintendo (NES), and Sega (Genesis) took the lead. Atari attempted a rebirth with its “Jaguar” console but failed miserably.

The demise of Atari’s 2600 console was particularly notable. When it debuted in 1977, the system revolutionized the home game market on its way to selling more than 30 million units.  For a few years, it utterly dominated the console market and the company “rushed out games, assuming that its customers would play whatever it released,” notes New York Times reporters Sam Grobart and Ian Austen. But demand rapidly dried up as other consoles and personal computers took the lead with more powerful, flexible platforms and games. In the end, “millions of unsold games and consoles were buried in a New Mexico landfill in 1983. Warner Communications, which bought Atari in 1976 for $28 million, sold it in 1984 for no cash.”

The next generation of machines was dominated by Nintendo and Sega. But by the turn of the century, more new faces appeared and disrupted the second generation of market leaders. Sony (PlayStation) and Microsoft (Xbox) introduced powerful new consoles that continue to evolve to this day. Both consoles have already cycled through three iterations, each increasingly powerful and more functional. Sega dropped out of the console business and refocused on game development. Nintendo managed to survive with its innovative “Wii” system, but has fallen from its perch as king of the console market. Many also forget Apple’s failed run at the console business with its “Pippin” system in the late 1990s. Steve Jobs killed off the console when he returned to once again lead Apple in 1997. Ironically, just a decade later, with the rise of the iPhone and the Apple App Store, the company would emerge as a major player in the gaming market as smartphone gaming exploded.

Of course, PC gaming existed across these generations and handheld gaming devices and now smartphones are also providing competition to traditional consoles. Arcade games also existed both then and now. Thus, the video game market has always been broader than just home gaming consoles.

Nonetheless, at no time during the turbulent history of this sector have major consoles interoperated. The result has been a constant effort by major console developers to leap-frog the competition with increasingly innovative and powerful consoles and peripherals. Would Microsoft have developed the Kinect motion-sensing device if Nintendo had not previously developed their game-changing Wii motion controllers? It’s impossible to know but it would seem that non-interoperability had something to do with that beneficial development. Microsoft needed a game-changing peripheral of its own to meet the Nintendo challenge since Nintendo was not about to share its innovations with the competition. Meanwhile, Sony has developed its own motion-based “Move” system to compete Microsoft and Nintendo.

This is a highly dynamic marketplace at work. Could policymakers have determined that 3 major non-interoperable home consoles would have produced so much innovation? Would they have judged that to be too much or too little competition?  Would they have been able to foresee or help bring about the disruptive competition from portable gaming devices or smartphones? What sort of interop regulation would have made that happen?

As Palfrey and Gasser suggest in their book, there really “is no single form or optimal amount of interoperability that will suit every circumstance.” The video game case study seems to prove that. Yet, their framework leaves the door open a bit wider for state meddling to determine “optimal interop.” I have little faith that state planners could have given us a more innovative video game marketplace through interop nudging. And I also worry that if the door had been open for regulators at the FCC or elsewhere to influence interoperability decisions, it might have also opened to the door to content regulation since many lawmakers have long had an appetite for video game censorship.

Smartphones

The mobile phone handset and operating system marketplace has undergone continuous change over the past 15 years and is still evolving rapidly. There are some interoperable elements, such as the ability to make connecting calls and send texts and IMs. But other parts of the smartphone ecosystem are not interoperable, such as underlying operating systems or apps and app stores.

In the midst of this mixed system of interoperable and non-interoperable elements, innovation and cut-throat competition have flourished.

When cellular telephone service first started taking off in the mid-1990s, handsets and mobile operating systems were essentially one in the same, and Nokia and Motorola dominated the sector with fairly rudimentary devices. The era of personal digital assistants (PDAs) dawned during this period, but mostly saw a series of overhyped devices, including Apple’s “Newton,” that failed to catch on. In the early 2000s, however, a host of new players and devices entered the market, many of which are still on the scene today, including LG, Sony, Samsung, Siemens, and HTC. Importantly, the sector began splitting into handsets versus operating systems (OS). Leading mobile OS makers have included: Microsoft, Palm, Symbian, BlackBerry (RIM), Apple, and Android (Google).

The sector continues to undergo rapid change and interoperability norms have evolved at the same time. Looking back, it’s hard to know whether increased interoperability would have helped or hurt the state of competition and innovation.

Consider Palm, Blackberry, and Microsoft which all limited interoperability with other systems in various ways. Palm smartphones were wildly popular for a brief time and brought many innovations to the marketplace, for example. Palm underwent many ownership and management changes, however, and rapidly faded from the scene.  After buying Palm in 2010, HP announced it would use its webOS platform in a variety of new products.  That effort failed, however, and HP instead announced it would transition webOS to an open source software development mode.

Similarly, RIM’s BlackBerry was thought to be the dominant smartphone device for a time, but it has recently been decimated. BlackBerry’s rollercoaster ride has left it “trying to avoid the hall of fallen giants” in the words of an early 2012 New York Times headline.  The company once commanded more than half of the American smartphone market but now has under 10 percent, and that number continues to fall.

Microsoft also had a huge lead in licensing its Windows Mobile OS to high-end smartphone handset makers until Apple and Android disrupted its business. It’s hard to believe now, but just a few years ago the idea of Apple or Google being serious contenders in the smartphone business was greeted with suspicion, even scorn by popular handset makers such as Nokia and Motorola. This serves as another classic example of those with a static snapshot mentality disregarding the potential for new entry and technological disruption. Just a few years later, Nokia’s profits and market share have plummeted and a struggling Motorola was purchased by Google. Meanwhile, again, Palm seems dead, BlackBerry is dying, and Microsoft is struggling to win back market share it has lost to Apple and Google in this arena.

It would seem logical to conclude that the ebbs and flows of interoperable and non-interoperable elements of the smartphone world have created a turbulent but vibrantly innovative sector. Has the lack of interoperable operating systems or apps and apps stores hurt smartphone consumers? It’s hard to see how. Mandating interoperability at either level could lead to an OS or app store monopoly, most likely for Apple if such a policy were pursued today.

While Apple has had great success and earned endless kudos for their slick, user-friendly innovations from consumers and tech wonks alike, some critics decry their proprietary business model and more “controlled” user experience. Apple tightly controls almost every level of production of its iPhone smartphone and iPad tablet. Interoperability with competing systems, standards, or technologies is limited in many ways. Is that bad? Some critics think so, suggesting that greater “openness” — presumably in the form of greater device or program interoperability — is needed. But so what? Consumers seem extremely happy with Apple devices. Moreover, well-heeled rivals like Google (Android) and Microsoft continue to innovate at a healthy clip and offer consumers a decidedly different user experience. As with video games consoles, non-interop has had some important dynamic effects and advantages for consumers. It’s hard to know what “optimal interoperability” would even look like in the modern smartphone marketplace and how it would be achieved, but it’s equally hard to believe that consumers would be significantly better off if regulators were trying to achieve it through top-down mandates on such a dynamic, fast-moving market.  [For more on this topic, see my 2011 book chapter, “The Case for Internet Optimism, Part 2 – Saving the Net From Its Supporters,” from the book, The Next Digital Decade.]

Case Study Summary & Analysis

These case studies suggest that defining “optimal interoperability” is a pipe dream. In some cases, consumers demanded a certain amount interoperability and they got it. But it seems equally obvious that they did not demand perfect interoperability in every case. Few consumers are tripping over their own feet in a mad rush to toss out their XBoxs or iPhones just because they are not perfectly interoperable. On the other hand, since the days of the old “walled garden” hell of AOL, CompuServe, Prodigy, and so on, it would seem that information technology markets are growing more “open” in other ways. You can’t completely lock-down a user’s online experience and expect to win their business over the long haul.

Palfrey and Gasser make that point quite nicely in the book:

Increasingly, though, businesses are seeing the merits of strategies based on openness. A growing number of businesses are pursuing models that incorporate interoperability as a core principle. More and more firms, especially in the information business, are shedding their proprietary approaches in favor of interoperability at multiple levels. The goal is not to be charitable to competitors or customers, of course, but to maximize returns over time by building an ecosystem with others that holds greater promise than the go-it-alone approach (p. 149).

Quite right, but let’s not pretend that any mass market information platforms or systems will ever be perfectly “open” or interoperable. There will always be some limitations on how such systems are used or shared. And that’s just fine once you embrace a more flexible theory of evolutionary interoperability.  Ongoing experiments will get us to a better place.

Conclusion: Let Interop Experiments Continue!

So, let me wrap up by restating my alternative theory of optimal interoperability as succinctly as possible: When in doubt, ongoing, bottom-up, dynamic experimentation will almost always yield better answers than arbitrary intervention and top-down planning. Again, that is not to say that all interoperability experiments will leave society better off in the short-term. Some interoperability experiments and resulting market norms or outcomes can create challenging dilemmas for individuals and institutions. There may be short-term spells of “market power,” for example, and some standards may get locked in longer than some of us think makes sense. If, however, we have faith in humans to solve problems with information and technology, then still more experimentation — not state intervention — is the answer. And that is especially true once you accept the fact that those seeking to intervene have very limited knowledge of all the relevant facts needed to even make wise decisions about the future course of technology markets or information systems.

Some will find my alternative theory of optimal interoperability no more satisfying than Palfrey and Gasser’s since they may find the experimental interop framework too inflexible when it comes to state action. Whereas the frustration with Palfrey and Gasser’s theory will likely flow from their failure to define a coherent standard for when intervention is warranted, my approach solves that problem by suggesting we should largely abandon the endeavor and instead let ongoing market experiments solve interop problems over time. For me, we would need to find ourselves in a veritable whole-world-is-about-to-go-to-hell sort of moment before I could go along with state intervention to tip the interop scales in one direction or another. And, generally speaking, this is exactly the sort of thing that antitrust laws are supposed to address after a clear showing of harm to consumer welfare. Stated differently, to the extent any state intervention to address interoperability can be justified, ex post antitrust remedies should almost always trump ex ante regulatory meddling.

This alternative vision of evolutionary, experimental interoperability will be rejected by those who believe the state has the ability to wisely intervene and nudge markets to achieve “optimal interoperability” through some sort of Goldilocks principle that can supposedly get it just right. For those of us who have doubts about the likelihood of such sagacious state action — especially for fast-paced information sectors — the benefits of ongoing marketplace experimentation far outweigh the costs of letting those experiments run their course.

Regardless, we should be thankful that John Palfrey and Urs Gasser have provided us with a book that so perfectly frames what should be a very interesting ongoing debate over these issues. I encourage everyone to pick up a copy of Interop so you can join us in this important discussion.

Additional Reading:

]]> https://techliberation.com/2012/06/11/what-is-%e2%80%9coptimal-interoperability%e2%80%9d-a-review-of-palfrey-gasser%e2%80%99s-%e2%80%9cinterop%e2%80%9d/feed/ 4 41384 More on Facebook’s “Private IPO,” Securities Regs & Unintended Consequences https://techliberation.com/2011/01/05/more-on-facebooks-private-ipo-securities-regs-unintended-consequenses/ https://techliberation.com/2011/01/05/more-on-facebooks-private-ipo-securities-regs-unintended-consequenses/#comments Wed, 05 Jan 2011 14:59:35 +0000 http://techliberation.com/?p=34098

In my essay yesterday, “How Federal Accounting & Securities Regs Screw Up Your Chance to Invest in Facebook,” I noted how America’s counter-productive accounting, disclosure, and governance regulations are increasingly thwarting the ability of average Americans to invest in some of the leading capitalist innovators of the Digital Age. In this case it’s Facebook, but there are plenty of other innovative companies out there sticking with private shareholders so as not to trigger burdensome securities and accounting regs.  In my essay, I also noted how this represented another prime example of well-intentioned regulation having profoundly unintended, anti-consumer, anti-competitive consequences.  America’s convoluted and onerous securities regulations are choking off capital infusions into innovative companies and denying average investors a chance to own a share a piece of the American dream.

So, what does the Securities and Exchange Commission (SEC) plan to do about this fine mess?  Regulate more, of course!  As The Wall Street Journal reports today:

The Securities and Exchange Commission has begun examining whether disclosure rules for privately held firms need to be rewritten as a result of recent deals allowing investors to buy shares in Internet companies such as Facebook Inc. and Twitter Inc., according to people familiar with the situation.  The review is at an early stage, these people cautioned, and SEC officials looking at the recent deals haven’t concluded that any of them run afoul of the 47-year-old rules governing private companies. The rules require firms with 500 or more shareholders of record in a given type of stock to publicly disclose certain financial information. The requirement is designed to protect investors from risking money on companies that say little about their operations and performance.

Yes, but that requirement can also trigger an onslaught of new regulatory burdens, as the Journal story continues on to note:

While SEC officials could decide the rules need to be updated in order to provide adequate protection for investors, the agency is trying to balance that with the demands of private companies that want to raise capital. As part of the investigation, SEC officials plan to scrutinize special-purpose vehicles like the one being created by Goldman and Facebook to determine if they are being designed primarily to circumvent the so-called 500-shareholder rule, according to people familiar with the matter.

Well of course Facebook is sticking under the 500-shareholder threshold to avoid triggering an avalanche of new regulation!  Wouldn’t you?  This isn’t shady business as some naively suggest, this is smart business.  Facebook wants to be able to continue to invest, innovate, and grow.  Going public in the current regulatory environment, however, might undermine those goals because of the new regulatory burdens that would accompany expanding the pool of shareholders.

America needs to get smart about its overly burdensome securities laws before more damage is done.  As Marc Morgenstern, a securities lawyer in San Francisco and the managing partner of Blue Mesa Partners, a venture capital firm told DealBook: “Companies forming today, like Facebook, are growing so quickly, and their stocks are being distributed so broadly, that they may not fit neatly within securities laws enacted decades ago.”  That’s exactly right. Even the 500-shareholder threshold is a relic of the 1960s.  But the newer regulatory burdens are the real killers. As Anupreeta Das and Amir Efrati explained in yesterday’s Wall Street Journal:

The [Facebook private offering] is the latest example of how Silicon Valley’s newest generation of Web companies is taking capital to stay private for longer. While as recently as a decade ago it was a status symbol in Silicon Valley to go public quickly, Facebook, Twitter Inc., Groupon Inc. and others are among the new crop of firms that have recently raised big money in private financing rounds that provides them a cash cushion to continue remaining private. Across Silicon Valley, “the incentive for going public has lowered and the penalty for going public has increased,” said Ben Horowitz, a partner at venture-capital firm Andreessen Horowitz, which in November bought Facebook shares from venture-firm Accel Partners in a private transaction. “Compared to the 1990s when everybody went public as soon as possible at much lower revenues,” the regulatory environment and the rise of hedge funds has made it “dangerous” for start-ups go to public without a large cushion of cash, said Mr. Horowitz. “In general, we recommend that our companies be very careful about going public.”

Why should tech companies tread cautiously in this regard?  Why must they, as Mr. Horowitz suggests, “be careful about going public?”  Well, for starters, read this excerpt from a 2006 submission to the SEC by the Silicon Valley Leadership Group regarding the burdens imposed just by the Sarbanes-Oxley Act of 2002 (SOX):

SOX compliance brings with it a heavy burden that strains resources that could otherwise be used for critical research and development or other corporate initiatives to improve company management, expand into new markets and increase investor value.  Initially, the SEC suggested that the average company would have to spend $91,000 dollars annually.   However, in a recent survey of National Association of Manufacturers members about 50% of respondents reported spending more than $5 million in 2004 to comply.   More recently, a Financial Executives International (FEI) survey of 274 public companies indicated a 16.3 % reduction in SOX related costs in 2005 from the year previously, but that the total average cost for compliance was $3.8 million.

And there’s plenty more red tape to contend with when companies go public.  Again, this hurts not merely the companies but also those average investors who’d like a chance to buy in to hold a small share of the American Dream. As Albert Wenger of Union Square Ventures correctly notes in his essay, “The Private IPO“:

These deals should really be a wake-up call to politicians and regulators.  They are a great example of how well-intentioned regulations can backfire.  The net result of the Wall Street research settlement, SARBOX and other protections for small investors has been: small investors now have no access to the most interesting investment opportunities.  Instead, these companies are going to be more or less fully developed by the time they eventually come to the public markets, with most of the upside having been captured by private investors.  That’s especially annoying when it seems that with the Internet we should be seeing IPO 2.0 — direct to small investors without the historic flip opportunity for well connected investors.

How incredibly sad. And how incredibly frightening for the future of American competitiveness.

Let’s be clear, cleaning up this mess doesn’t mean the SEC would be devoid of any role in policing capital markets for fraud.  A certain amount of transparency is essential for good corporate governance.  But the path we are now is instead wrapping companies and capital markets in layers of red tape that suffocate investment and innovation.  Moreover, as today’s news from the SEC proves, regulatory intervention in these cases simply begets more and more intervention to correct the inevitable failures of, or dissatisfaction with, previous interventions.

In that regard, I’m reminded of what Austrian economist Ludwig von Mises had to say about government intervention in his 1949 classic, Human Action:

All varieties of interference with the market phenomena not only fail to achieve the ends aimed at by their authors and supporters, but bring about a state of affairs which — from the point of view of their authors’ and advocates’ valuations — is less desirable than the previous state affairs which they were designed to alter. If one wants to correct their manifest unsuitableness and preposterousness by supplementing the first acts of intervention with more and more of such acts, one must go farther and farther until the market economy has been entirely destroyed and socialism has been substituted for it.”  at 858 (3rd ed. 1963) (1949).

No, I do not believe we are headed into a socialist hell-hole any time soon.  Nonetheless, the SEC appears poised to dig us into an even deeper ditch before thinking about an escape plan to get us out of this mess.

]]> https://techliberation.com/2011/01/05/more-on-facebooks-private-ipo-securities-regs-unintended-consequenses/feed/ 6 34098 Lori Drew Acquitted in Megan Meier Case: What to Do About Cyberbullying? https://techliberation.com/2009/07/02/lori-drew-acquitted-in-megan-meier-case-what-to-do-about-cyberbullying/ https://techliberation.com/2009/07/02/lori-drew-acquitted-in-megan-meier-case-what-to-do-about-cyberbullying/#comments Thu, 02 Jul 2009 20:22:06 +0000 http://techliberation.com/?p=19126

Lori Drew was convicted late last year on charges related to her role in a cruel hoax that led to the tragic suicide of thirteen-year old Megan Meier in Missouri in 2006. But today, at her sentencing, the judge threw out her convictions. Millions around the world were horrified by Megan’s fate, and many will probably be upset that Drew might go unpunished. But we need to separate three questions in this case:

  1. Should the federal anti-hacking law under which she was convicted really be applied in such cases?
  2. What, precisely, was Drew’s involvement?
  3. The key question: What should be done about the general problems of cyberbullying and cyberharassment?

Misuse of the Anti-Hacking Statute

Judge Wu has yet to issue his written opinion but seems to have agreed with the various experts on Internet law who argued that, however tragic the Meier case was, the Computer Fraud & Abuse Act (CFAA) should not have been applied to Drew. Most notably, the Electronic Frontier Foundation filed an Amicus Brief in support of Drew’s motion to dismiss the charges against her—summarized by Groklaw and the Harvard Journal of Law & Technology. Orin Kerr, a leading Internet law professor, felt so strongly about the consequences of using the CFAA to criminalize violations of privately written terms of service that he joined Drew’s defense team. Kerr demonstrated the problems of essentially allowing private parties to create the grounds for criminal offenses (if violated by users) by suggesting obviously ridiculous new terms of service for the Volokh Conspiracy, the group blog he writes on.

Hard as it may be for those who want to “see justice done” in this case, the CFAA just isn’t the right law to apply—which raises the question of whether new laws are needed, discussed below.

Uncertainty About Drew’s Role

The judge may also have been influenced by uncertainty as to Drew’s actual role in the case. Initial coverage of the story suggested that Drew created the fake MySpace persona of a teen boy (“Josh Evans”), then used that profile to woo Meier, a classmate of Drew’s daughter, only to deliberately—and cruelly—break her heart. After Missouri prosecutors and the FBI declined to press charges against Drew, federal prosecutors in California decided to do so, but Drew consistently maintained that it was not her idea to create the account.

When she finally went to trial, Ashley Grills, an 18-year-old friend of the Drew family, changed her story: Grills had initially claimed that creating the account was Ms. Drew’s idea, but admitted at trial that she (not Drew) created the fake “Josh Evans” account and that most of the conversations between Meier were with Grills, not Lori Drew. In particular, the final blow that seems to have driven the emotionally fragile Meier to suicide apparently came from Grils, not Drew:”You are a bad person and everybody hates you. Have a shitty rest of your life. The world would be a better place without you.”

We’ll probably never know exactly what actually happened, but it does appear that Drew was not the prime instigator behind the hoax, as she first appeared to be, but played more the role of a facilitator. Unconscionable as its for any adult, especially a parent to encourage, promote or even allow such behavior, it may not create legal liability.

Cyberbullying: What’s Next?

The real question here is how we should deal such cases more generally. Adam Thierer and I released a major study of these issues a few weeks ago: Cyberbullying Legislation: Why Education is Preferable to Regulation—which Adam recently dicussed at a Capitol Hill briefing. We distinguish among three problems that have been conflated in coverage of this issue:

  1. Cyberbullying: kid-on-kid abuse online
  2. Cyberharassment generally: people of all ages using the Internet to harass each other
  3. Adult-on-kid cyberharassment: the Megan Meier case

Confusion of these three issues has resulted in some very inappropriate responses to the problem. Most notably, Rep. Linda Sánchez has proposed the “Megan Meier Cyberbullying Prevention Act,” which would make it a federal felony with a sentence of up to two years to transmit “any communication… with the intent to coerce, intimidate, harass, or cause substantial emotional distress to a person, using electronic means to support severe, repeated, and hostile behavior.” While Sánchez claims uses the word “cyberbullying” (Problem #1), her rhetoric (and the title of the bill) is really focused on adult-on kid cyberharassment (Problem #3). Punishing that special kind of abuse by adults of children, who are particularly vulnerable, might well be something federal law should address. But Sánchez’s bill doesn’t do that; instead, it seeks to punish all cyberharassment (Problem #2). Sánchez’s fails in several other respects to clearly define its terms and scope, thus raising serious constitutional concerns about the bill’s effect on chilling constitutionally protected free speech, as well as about the due process rights of those who might be prosecuted under the bill.

In our paper, we highlight a number of substantial changes that would need to be made to create a narrowly-tailored bill appropriate to the problem of adult-on-kid cyberharassment. But we also explain why it’s probably not possible to craft a law consistent with the Constitution to address the general issue of cyberharassment: While state laws generally apply to cyberstalking (where a threat of physical harm is made or felt), it’s profoundly difficult to distinguish between “harassment” and simple online conversations.

We do think something can and should be done about the very real problem of kid-on-kid cyberbullying (Problem #1). But rather than treat kids as felons (the Sánchez approach), lawmakers could get serious about supporting online safety education, awareness-building efforts, prevention, and intervention. Such an approach would avoid thorny constitutional problems and has recently been floated in both chambers of Congress. In mid-May, the “School and Family Education about the Internet (SAFE Internet) Act” (S. 1047) was introduced in the Senate by Sen. Robert Menendez (D-NJ) and in the House by Rep. Debbie Wasserman Schultz (D-FL). The measure proposes an Internet safety education grant program that will be administered by the Department of Justice, in concurrence with the Department of Education, and the Department of Health & Human Services. These agencies will also work in consultation with education, Internet safety, and other relevant experts to administer a five-year grant program, under which each grant will be awarded for a two-year period. Eligible non-profits may use the grants to:

(1) identify, develop, and implement Internet safety education programs, including educational technology, multimedia and interactive applications, online resources, and lesson plans; (2) provide professional training to elementary and secondary teachers, administrators, and other staff on Internet safety and new media literacy; (3) develop online-risk prevention programs for children; (4) train and support peer-driven Internet safety education initiatives; (5) coordinate and fund research initiatives that investigate online risks to children and Internet safety education; (6) develop and implement public education campaigns to promote awareness of online risks to children and Internet safety education; (7) educate parents about teaching their children how to use the Internet and new media safely, responsibly, and ethically and help parents identify and protect their children from risks relating to use of the Internet and new media

This is exactly the right approach. This bill truly deserves the name “Cyberbullying Prevention Act,” while the Sánchez bill might more accurately be called the “Cyberharassment (of all kinds) Punishment Act.” Rather than pursuing regulation through criminal sanctions that would chill protected speech, education is the better approach—something the federal government can help to support. As Adam and I conclude in our paper:

Again, real online safety and proper netiquette begin at home. We need to teach our kids to be good cyber-citizens. We shouldn’t expect the government (or even schools) to do it all for us. But to the extent government can do something constructive about this problem, it is education and awareness-building that will have the most profound, lasting results. Although more substantive penalties cannot be ruled out entirely, creating new classes of crimes to deal with this problem is unlikely to solve the scourge of cyberbullying. Clearly, based on the emerging research, the young people who are involved in cyberbullying incidents—both as perpetrators and targets—have many problems. Addressing these painfully real issues will require applying effective risk prevention and intervention strategies. Instead of promoting such education, prevention, and intervention solutions, the Sánchez bill would simply create a new federal felony to address this problem. But criminalizing kid-on-kid behavior in whatever form will likely not solve the age-old problem of kids mistreating each other. Indeed, this problem has traditionally been dealt through counseling and rehabilitation at the local level. By contrast, the federal justice system generally works through criminal penalties. If federal criminal law has a role to play, it is in punishing clear cases of harassment of minors by adults in ways that do not chill free speech protected by the First Amendment and that are consistent with the Fourteenth Amendment’s due process guarantees. Unlike the Sánchez bill, the Menendez bill is grounded in the need to implement such counseling and rehabilitation approaches in schools and communities. If members of Congress want to enact legislation that has a chance of effectively reducing truly harmful behavior—and which avoids constitutional pitfalls and subsequent court challenges—the Menendez bill provides the best avenue to accomplish that important goal at this time.
]]> https://techliberation.com/2009/07/02/lori-drew-acquitted-in-megan-meier-case-what-to-do-about-cyberbullying/feed/ 31 19126 Cyberbullying Legislation: Why Education is Preferable to Regulation https://techliberation.com/2009/06/19/cyberbullying-legislation-why-education-is-preferable-to-regulation/ https://techliberation.com/2009/06/19/cyberbullying-legislation-why-education-is-preferable-to-regulation/#comments Fri, 19 Jun 2009 14:58:09 +0000 http://techliberation.com/?p=18743

By Berin Szoka & Adam Thierer

hand on mouseWe’ve just released a new PFF white paper (PDF) entitled, “Cyberbullying Legislation: Why Education is Preferable to Regulation.” In this 24-page study we note that, compared to previous fears about online predation, which have been greatly overblown, concerns about cyberbullying are more well-founded. Evidence suggests the cyberbullying is on the rise and that it can have profoundly damaging consequences for children.

Unsurprisingly, in the wake of a handful of high-profile cyberbullying incidents that resulted in teen/tween suicides, some state lawmakers began floating legislation to address the issue. More recently, two very different federal approaches have been proposed. One approach is focused on the creation of a new federal crime to punish cyberbullying, which would include fines and jail time for violators. In April 2008, Rep. Linda Sánchez (D-CA) introduced H.R. 1966 (originally H.R. 6123), the “Megan Meier Cyberbullying Prevention Act,” a bill that would create a new federal felony:

“Whoever transmits in interstate or foreign commerce any communication, with the intent to coerce, intimidate, harass, or cause substantial emotional distress to a person, using electronic means to support severe, repeated, and hostile behavior, shall be fined under this title or imprisoned not more than two years, or both.”

The other legislative approach is education-based and would create an Internet safety education grant program to address the issue in schools and communities. In mid-May, the “School and Family Education about the Internet (SAFE Internet) Act” (S. 1047) was introduced in the Senate by Sen. Robert Menendez (D-NJ) and in the House by Rep. Debbie Wasserman Schultz (D-FL). The measure proposes an Internet safety education grant program that will be administered by the Department of Justice, in concurrence with the Department of Education, and the Department of Health & Human Services. These agencies will also work in consultation with education, Internet safety, and other relevant experts to administer a five-year grant program, under which each grant will be awarded for a two-year period.

In our paper, we argue that criminalizing what is mostly kid-on-kid behavior—and especially creating a new federal felony, as the Sánchez bill proposes—will not likely solve the age-old problem of kids mistreating each other.  Moreover, this approach could raise thorny free speech and due process issues related to how the law defines harassing or intimidating speech. To the extent criminal sanctions are pursued as a solution, it may be preferable to allow state experimentation with varying models.

By contrast, education and awareness-based approaches have a chance of effectively reducing truly harmful behavior, especially over the long-haul. Such approaches would have the added benefit of avoiding constitutional pitfalls and subsequent court challenges. Thus, if lawmakers feel the need to address cyberbullying concerns at this time, it is clear that regulation is, at best, premature and that education is the better approach.

Our paper can be found on the PFF website or SSRN, and the Scribd version of the document is embedded down below. We welcome your comments on our conclusions.

[In a follow-up post, we will address why the criminalization approach to addressing cyberbullying raises free speech concerns and other constitutional issues.]

http://d1.scribdassets.com/ScribdViewer.swf?document_id=16558612&access_key=key-29i7qx077nfhk97cuqc0&page=1&version=1&viewMode=list]]> https://techliberation.com/2009/06/19/cyberbullying-legislation-why-education-is-preferable-to-regulation/feed/ 19 18743 Googlephobia: Part 5 – Google at Ten & Its Competition https://techliberation.com/2008/09/11/googlephobia-part-5-google-at-ten-its-competition/ https://techliberation.com/2008/09/11/googlephobia-part-5-google-at-ten-its-competition/#respond Thu, 11 Sep 2008 22:30:51 +0000 http://techliberation.com/?p=12657

By Berin Szoka & Adam Thierer

As we noted in our intro to this ongoing series, Google’s tenth anniversary has passed with Googlephobia reaching new heights of hysteria.

But is Google really too big and dangerous, or are people just too lazy to find other alternatives to each of the wonderful services that Google offers?  If one is truly paranoid about the firm’s supposed dominance, it doesn’t take much effort to live a Google-free life. To prove it, we set out to find alternatives to each of the services that Google provides.  After awhile, we got a little tired of compiling alternatives in each category and just provided links for the additional choices at your disposal.  It’s tough to see what the fuss is about with the cornucopia of choices at our disposal.  If you don’t like Google, then just don’t use it or any of its services.  The choice is yours.

In each case, we’ve listed Google first, even though Google may not be the market leader ( e.g., Google’s relatively unknown social network Orkut).

Search Engines

eMail

Encyclopedia

Instant Messaging

Web Browsers

Social Networks

Mapping

Mobile Search / Portal Services

Video Hosting

Photohosting

Document / Spreadsheet Creation

Online File Storage

Blog hosting services

RSS blog feed aggregators

WebClipping Services

News Aggregators

Calendar Services

]]> https://techliberation.com/2008/09/11/googlephobia-part-5-google-at-ten-its-competition/feed/ 0 12657 Googlephobia: The Series https://techliberation.com/2008/09/11/googlephobia-the-series/ https://techliberation.com/2008/09/11/googlephobia-the-series/#comments Thu, 11 Sep 2008 20:51:49 +0000 http://techliberation.com/?p=12534

By Berin Szoka & Adam Thierer as part of an ongoing series

With Google celebrating its 10th anniversary this week, many panicky pundits are using the occasion to claim that Google has become the Great “Satan” of the Internet.  Nick Carr wonders what the future holds for “The OmniGoogle.” The normally level-headed Mike Malone worries that Google is “turning into Big Brother.”  And Washington Post’s Rob Dubbin says that he can’t escape Google’s “tentacles,” even for just 24 hours.  Meanwhile, speculation abounds that the Justice Department is preparing a major antitrust lawsuit against Google concerning its advertising partnership with Yahoo! or perhaps even a broader suit concerning Google’s “dominance” of online advertising generally.

Carr quotes Google co-founder Sergey Brin’s now-famous 2003 interview:

I think people tend to exaggerate Google’s significance in both directions.  Some say Google is God.  Others say Google is Satan.  But if they think Google is too powerful, remember that with search engines, unlike other companies, all it takes is a single click to go to another search engine. People come to Google because they choose to.  We don’t trick them.

In the last five years, Google has become far more than just a search engine.  As Google’s suite of suite of complementary products continues to grow, so too does the specter of Google as an all-knowing and therefore all-powerful economic colossus.  Yet Google isn’t even close to being the sort of nefarious monopolist out to destroy user privacy at every turn, as some seem to imply—if not exclaim.  Indeed, in our view, the Net is overall a far better place because of the existence of Google and the many free services it provides consumers.

Our point is not that Google should be immune from criticism.  Indeed, healthy criticism of corporate actions plays a vital role in the free market by disciplining corporate policies and behavior—often thus providing an effective alternative to government regulation.  This is particularly important in the area of consumer privacy protection, as demonstrated by Google’s quick response to public concern about its Chrome EULA.

We hold no brief for Google and our aim is not to be Google apologists.  In fact, we’ve had more than a few run-ins with Google on many important policy issues in the past ( e.g., on net neutrality, spectrum policy, and the need for “baseline Federal privacy legislation”) and will likely continue to do so in the future.  We are always willing to engage serious, rational discussions about other policy issues involving Google, such as concerns about its alleged market power, but it seems to us that the hysteria about Google’s supposed dominance of the Internet is clouding rational discussion of the policy issues raised by Google, its innovations and its success.  Indeed, the creeping paranoia about all things Google-related that is most evident throughout the blogosphere (but that reaches far beyond it) has produced an environment that resembles nothing so much as a lynch mob:  Angry, short-tempered, out for corporate blood, and unwilling to engage in reasoned discussion.

Gates_of_BorgThe specter of Google’s market power driving—and confusing—so many of today’s Internet policy debates is reminiscent of the previous generation of conspiracy theories about how Microsoft, like the Borg (perhaps sci-fi’s scariest villains), would assimilate all in its path—forever controlling the digital revolution.  We don’t want Google to become the victim of the same regulatory & antitrust ordeal that Microsoft has endured over the past decade, with the kind of hysterical claims of Chicken Little-ism that drove a ten-year crusade against Microsoft.  Short-sighted, heavy-handed government intervention can cripple a creative company while doing little to actually benefit consumers because regulators cannot keep pace with technological change—perhaps the only constant fact in the every-changing digital world.

Of course, like all temporal things, Microsoft’s seemingly permanent “monopoly” has faded, and the bulk of the criticism it once faced has shifted focus to Google.  Microsoft continues to be the subject of many unfair attacks because of its success (a/k/a “dominance”) in the OS, office product, and browser markets.  Other companies have experienced similar attacks on a smaller scale:  Facebook and the once-angelic Apple have both been subject to increasing criticism for their success in certain sectors of the digital economy, customer complaints about openness ( e.g., “locked” devices or portability of social networking data) and privacy policies.  The hysteria surrounding Google is not unique in kind, yet it is clear that the mantle of “Great (digital) Satan” has clearly passed from Microsoft to Google.

Thus, we have decided to start a new series of essays on “Googlephobia” (a term that seems to have taken off in the spring of 2005, when the French government seriously proposed creating its own alternative to the Google search engine).  We’ve already penned a few essays on the topic here (as have a number of our TLF colleagues) and, therefore, our next installment in the series will be #5—in which we will outline the many competitors to Google’s many products.

But here are a few of our past essays on the topic, which clearly belong on the list even though they weren’t part of a series at the time:

And here’s an oldie on the same topic:

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