Adam Thierer’s claim that I am redefining monopoly in my Wall Street Journal piece is sowing confusion and misleading the public. Hence this corrective.
A monopoly is any firm that has a dominant share in the market for a given good or service (legal definitions range between 40% – 70%) resulting in power over that market. That is the beginning and the end of the definition. There is no further requirement that the firm be evil, gigantic, have caused consumer harm, be long-lasting, or anything else.
What Adam is thinking about is what a lawyer would call an “actionable” or “unlawful” monopoly; or perhaps a monopoly that violates s. 2 of the Sherman Act. But I never said in the Wall Street Journal that the Internet monopolies are unlawful. The point was that these are firms in the early age of monopoly, indeed in a kind of Golden Age.
To be more specific, by the economic and legal definition, in one or more markets, Google, Apple, Facebook, and eBay are pretty clearly monopolists. Google has market power over search. Apple, portable music players and iTunes downloads. Facebook, social media sites. eBay, online auctions.
Amazon and Twitter are closer cases; it all depends on market definition. Twitter’s market may be small, but the size of the market isn’t the point.
The key is understanding — and this is where a law degree can come in handy — that monopoly by itself is not unlawful in the United States. It is abuse of monopoly that is actionable. Continue reading →
Rob Pegoraro’s article in yesterday’s Washington Post is a worthy read, if only because it puts into context what is and isn’t a privacy breach.
Recently, there’s been a lot of noise–started by a Wall St Journal article–about a supposed privacy breach by Facebook surrounding the misuse of user data by applications installed on the user’s page. But as Pegoraro relates, this information was all public anyway, much like a phone book displays your identity. Here’s what he says is the difference between what is and isn’t a breach:
Privacy breach: Exposes private information you tried to keep confidential, in ways that risk the loss of money or security or otherwise fairly earn the adjective ‘Orwellian.’”
NOT a privacy breach: Information about you that is already made public to users of a website, including the “basic parameters of people’s accounts: their name, picture, gender and networks….”
The point is that we shouldn’t conflate the use (or misuse) of public information with the breach of private information. Doing so elevates a lesser offense at the expense of something that is much more serious.
But as much as I like the article, I also have a few quibbles. Pegoraro says that if users are still offended by Facebook, they should blame the site for its default settings and switch to a competitor. And while losing customers is the ultimate penalty for any business, he misses the point in a couple of ways. First, we want to encourage innovation in social media and information sharing, which means companies need the freedom to set and change default settings (I’ve blogged on this before). Second, instead of switching sites users can just adjust their privacy settings! This simple, less drastic measure wasn’t even mentioned.
I’m very pleased to announce that I am today joining the Mercatus Center at George Mason University as a Senior Research Fellow. I will be working in the Mercatus Center’s Technology Policy Program and covering many of the same issues I have been active on for many years now, including: free speech and child safety issues; privacy and advertising policy; communications and media law; Internet governance; online taxation and e-commerce regulation; and much more.
I’m particularly excited about joining Mercatus since it reunites me with my old Cato colleague Jerry Brito, who also blogs with me here at the TLF, of course. Jerry is also a senior research fellow at Mercatus and he has done a stellar job developing the Technology Policy Program at the Center. I very much look forward to working closely with him, my old friend Jerry Ellig, and the many other skilled intellectuals working in various programs throughout Mercatus. It’s an amazing group of scholars Mercatus has assembled and I know I have much to learn from all of them.
For those not familiar with the Mercatus Center, it was founded in 1985 and has become the world’s premier university source for market-oriented ideas. As its website notes, Mercatus is a university-based research center that aims to bridge the gap between academic ideas and real world problems: Continue reading →
Tim Wu appears hell-bent of redefining the English language. After reading his new book, The Master Switch: The Rise and Fall of Information Empires [See my 6-part review: 1, 2, 3, 4, 5, 6] and his new editorial in today’s Wall Street Journal, “In the Grip of the New Monopolists,” it’s clear to me that he has made it his mission in life to redefine some rather basic, widely-accepted economic terms to suit his own political purposes. Among them: “market power,” “monopoly,” and “laissez-faire.” I addressed his misuse of the term “market power” here and misunderstanding of the term “laissez-faire” here.
In today’s Journal editorial, it’s “monopoly” that Wu seeks to redefine. He begins his essay by asking: “How hard would it be to go a week without Google? Or, to up the ante, without Facebook, Amazon, Skype, Twitter, Apple, eBay and Google?” He continues on to suggest that these “new monopolists” have an iron lock on their respective markets and that there appears little hope of escaping them.
But the problem with his argument that “we are living in an age of large information monopolies” begins with the fact that he speaks of “monopolies” in a plural sense and apparently misses the irony of that entirely. If so many “information monopolies” exist, then Wu’s thesis is undermined by the very fact that no one company dominates the Internet landscape. What Wu is really suggesting is that the Digital Economy landscape is littered with dominant firms in industry sectors that he has defined extremely narrowly. Continue reading →
This week, we’ve seen reports in both The New York Times (“Stage Set for Showdown on Online Privacy“) and The Wall Street Journal (“Watchdog Planned for Online Privacy“) that the Obama Administration is inching closer toward adopting a new Internet regulatory regime in the name of protecting privacy online. In this essay, I want to talk about information control regimes, not from a normative perspective, but from a practical one. In doing so, I will compare the relative complexities associated with controlling various types of information flows to protect against four theoretical information harms: objectionable content, defamation, copyright, and privacy.
From a normative perspective, there are many arguments for and against various forms of information control. Here, for example, are the reasons typically given for why society might want to impose regulations on the Internet (or other communications channels) to address each of the four issues identified above:
- Content control / Censorship: We must control information flows to protect children from objectionable content or all citizens against some other form of supposedly harmful speech (hate speech, terrorist recruitment, etc).
- Defamation control: We must control information flows to protect people’s reputations.
- Copyright control: We must control information flows to protect the property rights of creators against unauthorized use / distribution.
- Privacy control: We must control information flows to protect against information flows that include information about individuals.
Again, there are plenty of good normative arguments in the opposite direction, many of which are based on free speech considerations since, by definition, information control regimes limit the flow of forms of speech. For privacy, I discussed such speech-related considerations in my essay on “Two Paradoxes of Privacy Regulation.” But what about the administrative or enforcement burdens associated with each form of information control? I increasingly find that question as interesting as the normative considerations.
Continue reading →
I’ve had quite enough of service providers of one kind or another making me part of their new social network. (I’m looking at you, Google Buzz.)
So here’s an article about how to control iTunes’ new Ping social network, which comes with iTunes 10.
Apple did a couple things right: They made it very clear in the “Terms and Conditions” click-through for the new version of the software that you’re getting Ping. It also appears to default to “off.” That’s what I found when I followed the directions in the article linked above, anyway.
If you want to be in yet another social network, you can enable Ping using those directions. You also might want to get your head checked. Something might be wrong in your real life.
If you’re in the D.C. area, come join the fun next Monday, November 15th, as the Advisory Committee on Transparency kicks off with its first event: The Future of Earmark Transparency (2:00 p.m., 2203 Rayburn House Office Building).
The Sunlight Foundation’s Daniel Schuman moderates a discussion that includes Steve Ellis of Taxpayers for Common Sense and yours truly. My WashingtonWatch.com project crowdsourced over 40,000 earmark requests last year, which we displayed on this map.
Earmarks are a hot topic right now. The new Republican Congress may make a move to ban them, but the Senate leadership may not be ready to go quite that far.
Will full-fledged earmark transparency be the compromise? It might provide a model for far more transparent processes throughout Congress.
Joseph Isenbergh, a professor at the University of Chicago Law School, discusses his new essay about open versus closed operating systems, their respective marketing strategies, and their influence on the smartphone market. Isenbergh talks about early competition between Macintosh, with its closed operating system integrated with its PC hardware, and Microsoft, with its openly-licensed operating system that could be installed on any PC. He discusses the trade-off between open platforms that offer lots of consumer choice and the ostensible enhanced user experience created by bundling software with hardware. Isenbergh speculates about the future of the smartphone market, Apple’s iOS, and Google’s Android. He also comments on VHS versus Sony Betamax recording systems, tie-in strategies in wine-selling, and Blu-ray versus HD-DVD formats.
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.