Vivek Wadhwa, who is affiliated with Harvard Law School and is director of research at Duke University’s Center for Entrepreneurship, has a terrific column in today’s Washington Post warning of the dangers of government trying to micromanage high-tech innovation and the Digital Economy from above.
For reasons I have never been able to understand, the Washington Post uses different headlines for its online opeds versus its print edition. That’s a shame, because while I like the online title of Wadhwa’s essay, “Uncle Sam’s Choke-Hold on Innovation,” the title in the print edition is better: “Google, Twitter and the Best Regulator.” By “best regulator” Wadhwa means the marketplace, and this is a point we have hammered on here at the TLF relentlessly: Contrary to what some critics suggest, the best regulator of “market power” is the market itself because of the way it punishes firms that get lethargic, anti-innovative, or just plain cocky. Wadhwa notes:
The technology sector moves so quickly that when a company becomes obsessed with defending and abusing its dominant market position, countervailing forces cause it to get left behind. Consider: The FTC spent years investigating IBM and Microsoft’s anti-competitive practices, yet it wasn’t government that saved the day; their monopolies became irrelevant because both companies could not keep pace with rapid changes in technology — changes the rest of the industry embraced. The personal-computer revolution did IBM in; Microsoft’s Waterloo was the Internet. This — not punishment from Uncle Sam — is the real threat to Google and Twitter if they behave as IBM and Microsoft did in their heydays.
Continue reading →
According to a report today from SAI Business Insider, “The Federal Trade Commission is actively investigating Twitter and the way it deals with the companies building applications and services for its platform.” Apparently the agency has reached out to some competing application / platform providers to ask questions about Twitter’s recent efforts to exert more control over the uses of its API by third parties. [The Wall Street Journal confirms the FTC’s interest in Twitter.]
It remains to be seen whether this leads to any serious regulatory action against Twitter by the FTC, but such a move wouldn’t necessarily be surprising considering the more activist tilt of the agency recently. It’s even less surprising considering that Columbia University law professor and prolific cyberlaw scholar Tim Wu was appointed as a senior advisor to the FTC earlier this year. When the announcement of Wu’s appointment was made, the Wall Street Journal kicked off an article with the warning, “Silicon Valley has a new fear factor.” It seems the Journal may have been on to something!
It’s impossible to know how much of an influence Tim Wu is having on the agency, but as I have noted here before, Prof. Wu is man with a healthy appetite for regulatory activism. [See all my essays about Wu’s work here.] Moreover, he’s a man who has already determined that Twitter is a “monopolist” in his November 13, 2010 Wall Street Journal op-ed, “In the Grip of the New Monopolists.”
That essay prompted a fiery response from me [“Tim Wu Redefines Monopoly“] as well as a far more reasoned essay by antitrust gurus Geoff Manne and Josh Wright [“What’s An Internet Monopolist? A Reply to Professor Wu.”] Prof. Wu was kind enough to swing by the TLF and respond to my criticisms in an essay “On the Definition of Monopoly,” which he said served as a “corrective” to my earlier essay [even though I continue to believe that what I said fairly reflected the last four decades of economic wisdom on competition policy and that it is Wu who is well off the reservation with his expansionist views of antitrust enforcement].
Regardless of what one thinks about that exchange, if the FTC is moving forward with a case against Twitter, three practical questions need to be considered: (1) What’s the relevant market? (2) Where’s the harm? and (3) What’s the remedy?
I’ll briefly discuss each question below but should also mention that I already explored many of these issues in my essay, “A Vision of (Regulatory) Things to Come for Twitter,” so I apologize in advance for the repetition. I will then discuss all this in the context of Tim Wu’s latest law review article on “Agency Threats” and what he approvingly refers to as regulatory “threat regimes.” Continue reading →
It might be tempting to laugh at France’s ban on words like “Facebook” and Twitter” in the media. France’s Conseil Supérieur de l’Audiovisuel recently ruled that specific references to these sites (in stories not about them) would violate a 1992 law banning “secret” advertising. The council was created in 1989 to ensure fairness in French audiovisual communications, such as in allocation of television time to political candidates, and to protect children from some types of programming.
Sure, laugh at the French. But not for too long. The United States has similarly busy-bodied regulators, who, for example, have primly regulated such advertising themselves. American regulators carefully oversee non-secret advertising, too. Our government nannies equal the French in usurping parents’ decisions about children’s access to media. And the Federal Communications Commission endlessly plays footsie with speech regulation.
In the United States, banning words seems too blatant an affront to our First Amendment, but the United States has a fairly lively “English only” movement. Somehow, regulating an entire communications protocol doesn’t have the same censorious stink.
So it is that our Federal Communications Commission asserts a right to regulate the delivery of Internet service. The protocols on which the Internet runs are communications protocols, remember. Withdraw private control of them and you’ve got a more thoroughgoing and insidious form of speech control: it may look like speech rights remain with the people, but government controls the medium over which the speech travels.
The government has sought to control protocols in the past and will continue to do so in the future. The “crypto wars,” in which government tried to control secure communications protocols, merely presage struggles of the future. Perhaps the next battle will be over BitCoin, an online currency that is resistant to surveillance and confiscation. In BitCoin, communications and value transfer are melded together. To protect us from the scourge of illegal drugs and the recently manufactured crime of “money laundering,” governments will almost certainly seek to bar us from trading with one another and transferring our wealth securely and privately.
So laugh at France. But don’t laugh too hard. Leave the smugness to them.
My latest Forbes column is entitled “With Freedom of Speech, The Technological Genie Is Out of the Bottle,” and it’s a look back at the amazing events that unfolded over the past week in the U.K. regarding privacy, free speech, and Twitter. I’m speaking, of course, about the “super-injunction” mess. I relate this episode to the ongoing research Jerry Brito and I are doing examining the increasing challenges of information control.
I begin by noting that:
When it comes to freedom of speech in the age of Twitter, for better or worse, the genie is out of the bottle. Controlling information flows on the Internet has always been challenging, but new communications technologies and media platforms make it increasingly difficult for governments to crack down on speech and data dissemination now that the masses are empowered. The most recent exhibit in the information control follies comes from the United Kingdom, where in the span of just one week the country’s enhanced libel law procedure was rendered a farce.
I go on to explain how Britain’s super-injunction regulatory regime unraveled so quickly and why it’s unlikely to be effectively enforceable in the future. Read the entire essay over at Forbes and then also check out Jerry’s Time TechLand editorial from last week, “Twitter’s Super-Duper U.K. Censorship Trouble.” I also just saw this piece by British defamation expect John Maher: “Law Playing Catch-up with New Media.” It’s worth a read.
One of my favorite topics lately has been the challenges faced by information control regimes. Jerry Brito and I are writing a big paper on this issue right now. Part of the story we tell is that the sheer scale / volume of modern information flows is becoming so overwhelming that it raises practical questions about just how effective any info control regime can be. [See our recent essays on the topic: 1, 2, 3, 4, 5.] As we continue our research, we’ve been attempting to unearth some good metrics / factoids to help tell this story. It’s challenging because there aren’t many consistent data sets depicting online data growth over time and some of the best anecdotes from key digital companies are only released sporadically. Anyway, I’d love to hear from others about good metrics and data sets that we should be examining. In the meantime, here are a few fun facts I’ve unearthed in my research so far. Please let me know if more recent data is available. [Note: Last updated 7/18/11]
- Facebook: users submit around 650,000 comments on the 100 million pieces of content served up every minute on its site.[1] People on Facebook install 20 million applications every day.[2]
- YouTube: every minute, 48 hours of video were uploaded. According to Peter Kafka of The Wall Street Journal, “That’s up 37 percent in the last six months, and 100 percent in the last year. YouTube says the increase comes in part because it’s easier than ever to upload stuff, and in part because YouTube has started embracing lengthy live streaming sessions. YouTube users are now watching more than 3 billion videos a day. That’s up 50 percent from the last year, which is also a huge leap, though the growth rate has declined a bit: Last year, views doubled from a billion a day to two billion in six months.”[3]
- eBay is now the world’s largest online marketplace with more than 90 million active users globally and $60 billion in transactions annually, or $2,000 every second.[4]
- Google: 34,000 searches per second (2 million per minute; 121 million per hour; 3 billion per day; 88 billion per month).[5]
- Twitter already has 300 million users producing 140 million Tweets a day, which adds up to a billion Tweets every 8 days[6] (@ 1,600 Tweets per second) “On the first day Twitter was made available to the public, 224 tweets were sent. Today, that number of updates are posted at least 10 times a second.”[7]
- Apple: more than 10 billion apps have been downloaded from its App Store by customers in over 77 countries.[8] According to Chris Burns of SlashGear, “Currently it appears that another thousand apps are downloaded every 9 seconds in the Android Marketplace while every 3 seconds another 1,000 apps are downloaded in the App Store.”
- Yelp: as of July 2011 the site hosted over 18 million user reviews.[9]
- Wikipedia: Every six weeks, there are 10 million edits made to Wikipedia.[10]
- “Humankind shared 65 exabytes of information in 2007, the equivalent of every person in the world sending out the contents of six newspapers every day.”[11]
- Researchers at the San Diego Supercomputer Center at the University of California, San Diego, estimate that, in 2008, the world’s 27 million business servers processed 9.57 zettabytes, or 9,570,000,000,000,000,000,000 bytes of information. This is “the digital equivalent of a 5.6-billion-mile-high stack of books from Earth to Neptune and back to Earth, repeated about 20 times a year.” The study also estimated that enterprise server workloads are doubling about every two years, “which means that by 2024 the world’s enterprise servers will annually process the digital equivalent of a stack of books extending more than 4.37 light-years to Alpha Centauri, our closest neighboring star system in the Milky Way Galaxy.”[12]
- According to Dave Evans, Cisco’s chief futurist and chief technologist for the Cisco Internet Business Solutions Group, about 5 exabytes of unique information were created in 2008. That’s 1 billion DVDs. Fast forward three years and we are creating 1.2 zettabytes, with one zettabyte equal to 1,024 exabytes. “This is the same as every person on Earth tweeting for 100 years, or 125 million years of your favorite one-hour TV show,” says Evans. Our love of high-definition video accounts for much of the increase. By Cisco’s count, 91% of Internet data in 2015 will be video.[13]
[12] Rex Graham, “Business Information Consumption: 9,570,000,000,000,000,000,000 Bytes per Year,” UC San Diego News Center, April 6, 2011, http://ucsdnews.ucsd.edu/newsrel/general/04-05BusinessInformation.asp.
Twitter could be in for a world of potential pain. Regulatory pain, that is. The company’s announcement on Friday that it would soon be cracking down on the uses of its API by third parties is raising eyebrows in cyberspace and, if recent regulatory history is any indicator, this high-tech innovator could soon face some heat from regulatory advocates and public policy makers. If this thing goes down as I describe it below, it will be one hell of a fight that once again features warring conceptions of “Internet freedom” butting heads over the question of whether Twitter should be forced to share its API with rivals via some sort of “open access” regulatory regime or “API neutrality,” in particular. I’ll explore that possibility in this essay. First, a bit of background.
Understanding Forced Access Regulation
In the field of communications law, the dominant public policy fight of the past 15 years has been the battle over “open access” and “neutrality” regulation. Generally speaking, open access regulations demand that a company share its property (networks, systems, devices, or code) with rivals on terms established by law. Neutrality regulation is a variant of open access regulation, which also requires that systems be used in ways specified by law, but usually without the physical sharing requirements. Both forms of regulation derive from traditional common carriage principles / regulatory regimes. Critics of such regulation, which would most definitely include me, decry the inefficiencies associated with such “forced access” regimes, as we prefer to label them. Forced access regulation also raises certain constitutional issues related to First and Fifth Amendment rights of speech and property. Continue reading →
That will be the subject of a Cato on Campus session this afternoon entitled: “The Internet and Social Media: Tools of Freedom or Tools of Oppression?” Watch live online at the link starting at 3:30 p.m., or attend in person. A reception follows.
The delight that so many felt to see protesters in Iran using social media has given way to delight about the use of Facebook to organize for freedom in Egypt. But this serial enthusiasm omits that the “Twitter revolution” in Iran did not succeed. The fiercest skeptics even suggest that the Tweeting during Iran’s suppressed uprising was mostly Iranian ex-pats goosing excitable westerners and not any organizing force within Iran itself. Coming to terms with the Internet, dictatorships are learning to use it for surveillance and control, possibly with help from American tech companies.
So is the cause of freedom better off with the Internet? Or is social media a shiny bauble that distracts from the long, heavy slog of liberating the people of the world?
Joining the discussion will be Chris Preble, Director of Foreign Policy Studies at Cato; Alex Howard, Government 2.0 Correspondent for O’Reilly Media; and Tim Karr, Campaign Director at Free Press. More info here.
The Sixth Circuit ruled on Tuesday that criminal investigators must obtain a warrant to seize user data from cloud providers, voiding parts of the notorious Stored Communication Act. The SCA allowed investigators to demand providers turn over user data under certain circumstances (e.g., data stored more than 180 days) without obtaining a warrant supported by probable cause.
I have a very long piece analyzing the decision, published on CNET this evening. See “Search Warrants and Online Data: Getting Real.” (I also wrote extensively about digital search and seizure in “The Laws of Disruption.”) The opinion is from the erudite and highly-readable Judge Danny Boggs. The case is notable if for no other reason than its detailed and lurid description of the business model for Enzyte, a supplement that promises to, well, you know what it promises to do…. Continue reading →
The ACLU of Northern California says it’s time for a privacy check-in on location based-services. Their handy chart compares several of the most popular location-based services along a number of dimensions.
Little of what they examine has to do with civil liberties—cough, cough, ahem (this is a favorite critique of mine for my ACLU friends)—but the report does find that five out of six location-based providers are unclear about whether they require a warrant before handing information over to the government. Facebook is the winner here. Yelp, Foursquare, Gowalla, Loopt, and Twitter are unclear about whether they protect your location data from government prying.
I am so gonna retweet this.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.