On the podcast this week, Catherine Tucker, Douglas Drane Career Development Professor in IT and Management, and Assistant Professor of Marketing at MIT’s Sloan School of Management, discusses her paper with Avi Goldfarb in the Journal of Competition Law and Economics entitled, Substitution Between Offline and Online Advertising Markets. According to Tucker, the FTC treats online advertising as a distinct market from offline advertising for antitrust purposes. She describes the study she and Goldfarb conducted, where they sought to determine whether online advertising could serve as a substitute for offline advertising. Tucker also discusses Google’s role in online advertising, how its auction mechanism affects pricing, and the difference between search advertising and display advertising. The conversation ends with a discussion on policy implications on how dominant players in online advertising should be viewed.
Related Links
To keep the conversation around this episode in one place, we’d like to ask you to comment at the webpage for this episode on Surprisingly Free. Also, why not subscribe to the podcast on iTunes?
Over at TIME.com I take a look at the different approaches to cybersecurity now being considered by Congress:
>But what can congress do to improve cybersecurity? One line of thinking reportedly embodied by the Senate legislation, though details of that bill are not yet available, would tell network owners how to protect their systems. The Department of Homeland Security would be charged with creating security rules and punishing companies that did not comply. Such a prescriptive approach may not be very helpful, however. …
>The bipartisan approach moving forward in the House, on the other hand, takes a different approach. At the center of the PRECISE Act is the creation of a non-profit National Information Sharing Organization (NISO) that would serve as a clearinghouse for the voluntary exchange of cybersecurity threat information between government and industry. Under the NISO umbrella, as long as they only share information for cybersecurity purposes, industry and government would be exempt from privacy laws that today restrict collaboration.
Read the whole thing at TIME.com.
Over at TIME.com I write that if you didn’t like SOPA because it threatened free speech, then you probably won’t like the new “Right to be Forgotten” proposed in the EU. Prof. Jane Yakowitz contributes some great insights to the piece. What I dislike most about the rule is that it subordinates expression to privacy:
>[T]he new law would flip the traditional understanding of privacy as an exception to free speech. What this means is that if we treat free expression as the more important value, then one has to prove a harmful violation of privacy before the speaker can be silenced. Under the proposed law, however, it’s the speaker who must show that his speech is a “legitimate” exception to a claim of privacy. That is, the burden of proof is switched so that speakers are the ones who would have to justify their speech.
Read the whole thing at TIME.com.
On the podcast this week, Reuben Grinberg, a recent Yale Law School graduate now in private practice in New York City, discusses his paper, published in the Hastings Science & Technology Law Journal entitled, Bitcoin: An Innovative Alternative Digital Currency. Grinberg first gives a brief overview of Bitcoin, the decentralized, digital currency. According to Grinberg, Bitcoin can maintain sustainability, even though it is not backed by an institution or commodity, but it must overcome several hurdles. Grinberg then discusses the potential security problems and legal issues Bitcoin faces. He also describes some of the unique qualities of Bitcoin, including the ability to conduct transactions anonymously. Grinberg ends the discussion with his thoughts on what Bitcoin could potentially become.
Related Links
To keep the conversation around this episode in one place, we’d like to ask you to comment at the webpage for this episode on Surprisingly Free. Also, why not subscribe to the podcast on iTunes?
Cybersecurity is one of the issues that the President may touch upon tonight in his State of the Union speech, and Senate Majority Leader Harry Reid has said he is ready to move on comprehensive cybersecurity legislation soon. This all raises the question: what is the problem we’re trying to fix?
In an important new working paper for the Mercatus Center at George Mason University, Eli Dourado asks if there is a market failure in cybersecurity that requires a government response. He concludes that policymakers may be jumping to conclusions a little too hastily.
Proponents of cybersecurity regulation make the case that private network owners do not completely internalize cyber risks. The reason, they say, is that a loss stemming from a cyber attack, against a financial network for example, will affect not just the network owner, but thousands of consumers as well. As a result, private network owners won’t spend the socially optimal amount on to meet that risk. That is a market failure, they say, and only government intervention can ensure that we get the right amount of cybersecurity.
In his paper, however,Dourado shows that the presence of an externality does not necessarily mean that there is a market failure. Externalities are often internalized by private parties without government intervention. This is true both generally and in the realm of cybersecurity. Policy makers, he says, should therefore be careful not to enact cybersecurity legislation just because they observe an externality. Regulating when there is no market failure will likely have dire unintended consequences.
You can download the paper at Mercatus.org.
Over at TIME.com, [I consult public choice theory to glean](http://techland.time.com/2012/01/23/why-we-wont-see-many-protests-like-the-sopa-blackout/) the meaning of last week’s SOPA protest success:
>The SOPA blackout protest last week was an unprecedented event. Its massive success — with dozens of members of Congress switching their stance in one day under the withering intensity of thousands of phone calls — surprised even the activists who spurred the protest. So does this mean that we are entering the much-heralded era of Internet-powered citizen democracy?
Read [the whole thing here](http://techland.time.com/2012/01/23/why-we-wont-see-many-protests-like-the-sopa-blackout/).
The Megaupload folks are not the most sympathetic defendants, to say the least. They likely knew very well they were profiting from piracy, and they probably induced it as well. Anonymous’s attacks in retaliation for the arrests and domain seizures, therefore, threaten to destroy the good will the Internet community generated the previous day with the SOPA protests. That all said, we can’t lose sight of the principle because of the bad actors involved.
This case shows that law enforcement is perfectly capable of securing international cooperation and taking direct action against large piracy operations overseas. The Megaupload principals were arrested and they now face extradition and trial. So why do we need due-process-free domain seizures or tinkering with the inner workings of the Internet to combat piracy?
This case also reminds us that the federal government already has the power to seize .com, .net, .org and other U.S.-registered domains. Stopping SOPA is one thing, but now the task should be rolling back excessive government powers to control information online.
The balance struck by the DMCA, which gives safe harbor to sites that take down allegedly infringing content when notified by the owner, is the right one. No safe harbor is available to sites that have actual knowledge that they are benefiting from pirated content, as is probably the case with Megaupload.
On the podcast this week, Michael Weinberg, staff attorney with Public Knowledge, discusses his white paper entitled, It Will Be Awesome If They Don’t Screw This Up: 3D Printing, Intellectual Property, and the Fight Over the Next Great Disruptive Technology. The discussion begins with Weinberg describing 3D printing: the process of printing three dimensional objects layer-by-layer from a digital file on a computer. According to Weinberg the design method used for printing includes programs like AutoCad and 3D scanners that can scan existing objects, making it possible to print a 3D replica. He goes on to explain why he thinks 3D printing, coupled with the Internet, is a disruptive technology. Finally, Weinberg discusses the thesis of his paper, where he anticipates industries affected by potential disruption will not compete with or adapt to this technology, but rather, will seek legal protection through IP law to preemptively regulate 3D printing.
Related Links
To keep the conversation around this episode in one place, we’d like to ask you to comment at the webpage for this episode on Surprisingly Free. Also, why not subscribe to the podcast on iTunes?
Over at TIME.com, [I write that](http://techland.time.com/2012/01/17/why-googles-biggest-problem-isnt-antitrust-with-search-plus-your-world/) while some claim that Google Search Plus Your World violates antitrust laws, it likely doesn’t. But I note that Google does have a big problem on its hands: market reaction.
>So if antitrust is not Google’s main concern, what is? It’s that user reaction to SPYW and other recent moves may invite the very switching and competitive entry that would have to be impossible for monopoly to hold. … Users, however, may not wait for the company to get it right. They can and will switch. And sensing a weakness, new competitors may well enter the search space. The market, therefore, will discipline Google faster than any antitrust action could.
Read [the whole thing here](http://techland.time.com/2012/01/17/why-googles-biggest-problem-isnt-antitrust-with-search-plus-your-world/).
On the podcast this week, Andrew McAfee, Principal Research Scientist at MIT’s Center for Digital Business, discusses his new book, co-authored with Erik Brynjolfsson, entitled, “Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy.” The book looks at the interplay between unemployment and fast-paced technological innovation. In the book, McAfee and Brynjolfsson propose that technology is outpacing humans, and they discuss whether humans can keep up. According to McAfee, technology is encroaching on skills that once belonged exclusively to humans. He believes that entrepreneurial thinking, different institutions, and new organizational structures can prevent humans from being left behind by the machines.
Related Links
To keep the conversation around this episode in one place, we’d like to ask you to comment at the webpage for this episode on Surprisingly Free. Also, why not subscribe to the podcast on iTunes?
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.