Epstein, Monopolies, and Legal Sophistry

Here’s another quote from How Progressives Rewrote the Constitution, on page 18:

The classical liberal joins the libertarian in a full-throated condemnation of state power used to create or perpetuate economic monopolies and private cartels in what would otherwise be competitive industries. The touchstone of the analysis that follows, therefore, is this: state power that may be used to limit monopoly power should never be converted into a force that creates or perpetuates monopoly power.

My last post probably came across as snarky, but I’m quite serious. Several DMCA defenders (although perhaps not Epstein himself) have argued that the DMCA’s lock-in effects are an argument in favor of the DMCA, a position that seems to me to stand in stark contrast to the sensible position that Epstein articulates here: that state monopolies should always be regarded with great skepticism. If it’s economically beneficial to prohibit people from building iTunes-compatible music players, would it also be economically beneficial to ban the sale of after-market auto parts? If not, what’s the difference?

I suspect the answer, in at least Epstein’s case, is that he doesn’t understand that prohibiting circumvention of DRM is equivalent to giving the DRM vendor a monopoly on compatible devices. Indeed, he seems to believe that it’s possible to “make it illegal for anyone to take actions that disable encryption devices” while allowing “for reverse engineering key elements of programs solely to insure ‘interoperability’ of some independent program.” As I’ve argued before, that’s not how DRM works: Prohibiting circumvention amounts to granting a monopoly over compatible devices.

To be fair, the error originated not with Epstein but with the drafters of the DMCA, who also seemed to believe (or at least hoped the world would believe) you could draw a meaningful distinction between circumvention and interoperability. Still, special interest groups often advance legislation that purports to do one thing but actually does something entirely different. Indeed, this kind of rent-seeking is one of the central themes of Epstein’s own work in other areas of the law. So it’s frustrating that he so blithely accepts the the copyright lobby’s fatuous justifications in this case.

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