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TOTM The European Union’s Digital Markets Act (DMA) has been finalized in principle, although some legislative details are still being negotiated. Alas, our earlier worries about user . . .
The European Union’s Digital Markets Act (DMA) has been finalized in principle, although some legislative details are still being negotiated. Alas, our earlier worries about user privacy still have not been addressed adequately.
Read the full piece here.
TOTM Just three weeks after a draft version of the legislation was unveiled by congressional negotiators, the American Data Privacy and Protection Act (ADPPA) is heading to its . . .
Just three weeks after a draft version of the legislation was unveiled by congressional negotiators, the American Data Privacy and Protection Act (ADPPA) is heading to its first legislative markup, set for tomorrow morning before the U.S. House Energy and Commerce Committee’s Consumer Protection and Commerce Subcommittee.
Regulatory Comments Abstract This comment by 25 law professors, economists and former United States government officials was submitted to the European Union Commission in response to a . . .
This comment by 25 law professors, economists and former United States government officials was submitted to the European Union Commission in response to a “call for evidence” on the licensing, litigation, and remedies of standard-essential patents (SEPs). It details the principal concepts and substantial evidence relating to the constructive role of SEPs in efficiently promoting innovation and structuring commercialization activities in high-tech devices generally and the mobile revolution specifically. It also addresses widespread misunderstandings and misstatements about the commercialization and litigation of SEPs. It broadly makes three points.
First, in contrast to the evidence of the positive role of SEPs in promoting innovation and commercialization in wireless technologies, no published empirical study has found evidence of the predicted marketplace effects of “holdup” or “royalty stacking” theories, such as higher prices, less innovation, and less market competition in smartphones. Second, contrary to claims by some commentators that courts do not issue injunctions for the infringement of SEPs, the comment reviews some representative decisions from the substantial case law in Europe in which SEP owners have requested or obtained injunctions against implementers engaging in holdout tactics. Third, it explains how courts have consistently held that the fair, reasonable, and non-discriminatory (FRAND) commitment by SEP owners does not mandate a “license to all” rule nor that reasonable royalties be calculated according to the “smallest salable, patent practicing unit” (SSPPU) standard. These court decisions are consistent with the economic function and evidence of SEP licensing on FRAND terms.
The mobile revolution has created unparalleled economic and technological growth over the past three decades. So long as courts provide robust enforcement of intellectual property rights, and do not impede the licensing and other contracts predicated on those rights, there is every reason to believe that the mobile market will continue to thrive. The comment concludes with an Appendix listing the substantial, published literature addressing both the success of the SEP-based sector of the global innovation economy and the numerous substantive and methodological flaws in “holdup” and “royalty stacking” theories.
Popular Media As Congress faces the possibility of a worldwide recession, historic inflation, pandemic recovery and supply chain issues – they should avoid increasing tariffs at all . . .
As Congress faces the possibility of a worldwide recession, historic inflation, pandemic recovery and supply chain issues – they should avoid increasing tariffs at all costs. Although tariffs might seem like a helpful tool – often they cause real damage by stifling trade and raising the prices of imports. Oregonians, like most Americans, are trying to find ways to make ends meet and the last thing they need is for costs to go up and that is exactly what Congress is considering right now.
Popular Media A non-compete obligation is a contractual promise by one party to refrain from conducting business of a similar nature to that of the other party. . . .
A non-compete obligation is a contractual promise by one party to refrain from conducting business of a similar nature to that of the other party. Non-compete obligations are encountered principally in contracts for the sale of a business and contracts of employment. In general (although with localized exceptions, e.g., regarding employment in the State of California), such agreements are enforceable provided they are reasonable and limited in scope, territory, and duration. In addition, employment non-compete obligations typically must be supported by adequate consideration. Non-compete obligations may be anticompetitive if they amount to a naked division of territory or customers among the parties or are collusively deployed among competing firms (i.e., “no poach agreements”).
Scholarship Abstract The phenomenon of social-media-driven trading (SMD trading) entered the public consciousness earlier this year when GameStop’s stock price was driven up two orders of . . .
The phenomenon of social-media-driven trading (SMD trading) entered the public consciousness earlier this year when GameStop’s stock price was driven up two orders of magnitude by a “hivemind” of individual investors coordinating their actions via social media. Some believe that GameStop’s price is artificially high and is destined to fall. Yet the stock prices of GameStop and other prominent SMD trading targets like AMC Entertainment continue to remain well above historical levels.
Much recent SMD trading is driven by profit motives. But a meaningful part of the rise has been a result of expressive trading—a subset of SMD trading—in which investors buy or sell for non-profit-seeking reasons like social or political activism, or for aesthetic reasons like a nostalgia play. To date, expressive trading has only benefited issuers by raising their stock prices. There is nothing, however, to prevent these traders from employing similar methods for driving a target’s stock price down (e.g., to influence or extort certain behaviors from issuers).
At least for now, stock prices raised by SMD trading have been sticky and appear at least moderately sustainable. The expressive aspect, which unites the traders under a common banner, is likely a reason that dramatic price increases resulting from profit-seeking SMD trading have persisted. Without a nonfinancial motivation to hold the group together, its members would be expected to defect and take profits.
Given that SMD trading appears to be more than a passing fad, issuers and their compliance departments ought to be prepared to respond when targeted by SMD trading. A question that might arise is whether and when SMD-trading-targeted issuers, and their insiders, may trade in their firms’ shares without running afoul of insider trading laws.
This Article proceeds as follows: Part I summarizes the current state of insider trading law, with special focus on the elements of materiality and publicity. Part II opens with a brief summary of the filing, disclosure, and other (non-insider-trading-related) requirements issuers and their insiders may face when trading in their own company’s shares under any circumstance. The remainder of this Part analyzes the insider trading-related legal implications of three different scenarios in which issuers and their insiders trade in their own company’s shares in response to SMD trading. The analysis reveals that although the issuer’s and insiders’ nonpublic internal information may be material (and therefore preclude their legal trading) prior to and just after the onset of third-party SMD trading in the company’s stock, subsequent SMD price changes (if sufficiently dramatic) may diminish the importance of the company’s nonpublic information, rendering it immaterial. If the issuer’s and insiders’ nonpublic information about the firm is immaterial, then they may trade while in possession of it without violating the anti-fraud provisions of the federal securities laws.
TOTM The Biden administration’s antitrust reign of error continues apace. The U.S. Justice Department’s (DOJ) Antitrust Division has indicated in recent months that criminal prosecutions may be forthcoming . . .
The Biden administration’s antitrust reign of error continues apace. The U.S. Justice Department’s (DOJ) Antitrust Division has indicated in recent months that criminal prosecutions may be forthcoming under Section 2 of the Sherman Antitrust Act, but refuses to provide any guidance regarding enforcement criteria.
Regulatory Comments We wish to highlight two primary concerns: that decisions by pole owners to delay maintenance and shift costs onto attachers are a significant impediment to deployment, and that there is a pressing need for the Commission to create an expedited process to resolve these disputes.
Thank you for the opportunity to comment on this Further Notice of Proposed Rulemaking (FNPRM) in the Matter of Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment. It is a broad aim of the U.S. government to extend broadband connectivity to all Americans.[1] However, a complicating factor in this regard is that Internet service providers (ISPs) need frequent access to utility poles to attach their equipment, which creates a point of friction that adds cost and slows deployment timetables.
These barriers to deployment can take many forms, some arising in areas over which the Commission does not have jurisdiction.[2] But with respect to those matters over which it does have jurisdiction, the Commission asks:
In this Second Further Notice, we seek comment on ways to eliminate or expedite resolution of pole replacement disputes by establishing clear standards for when and how utilities and attachers must share in the costs of a pole replacement that is precipitated by a new attachment request.[3]
Utility-pole attachments represent a critical component of deployment costs. Current estimates suggest that, in rural areas, as much as 25% of the cost of broadband deployment can be attributed to pole-replacement and upgrade issues.[4] We wish to highlight two primary concerns: that decisions by pole owners to delay maintenance and shift costs onto attachers are a significant impediment to deployment, and that there is a pressing need for the Commission to create an expedited process to resolve these disputes. We have attached to these brief comments a paper published by the International Center for Law & Economics and that expands on these and related issues in greater depth.
Read the full comments here.
[1] Infrastructure Investment and Jobs Act, H.R. 3684, 117th Cong. (2021).
[2] The FCC lacks jurisdiction over poles owned by electrical cooperatives or municipal governments, and 28 states have not verified that they have regulatory authority over pole attachments. See Michelle Connolly, The Economic Impact of Section 224 Exemption of Municipal and Cooperative Poles (Jul. 12, 2019), available at https://www.ncta.com/sites/default/files/2019-07/NCTA%20Muni%20and%20Coop%20Poles%20Connolly%20Paper%20Ex%20Parte%20Filing%207-22-19.pdf. While not the subject of this proceeding, it should be noted that excessive attachment fees from these sources impede broadband build-out by slowing growth and raising the expense to consumers of broadband access. For example, pass-through literature finds that 56% to 70% of wholesale price increases are passed on to consumers while 5.0% to 6.4% of increased commodity prices are passed on to consumers. See Cost Pass-Through: Theory, Measurement, and Potential Policy Implications: A Report Prepared for the Office of Fair Trading, RBB Economics, (February 2014), at 156-57, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/320912/Cost_Pass-Through_Report.pdf. We believe the Commission should engage on this issue as an expert adviser to state authorities that may have influence over these deployment barriers.
[3] Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment, FCC 22-20 (Mar. 16, 2022).
[4] Petition of NCTA for Expedited Declaratory Ruling, In the Matter of Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment, WC Docket No. 17-84 (Jul. 16, 2020), at 5-9, available at https://www.ncta.com/sites/default/files/2020-07/071620_17-84_NCTA_Petition_for_Declaratory_Ruling.pdf.
TL;DR After years of fragmented privacy law across the 50 states, a recently introduced bipartisan and bicameral bill proposes to create a federal privacy regime.
After years of fragmented privacy law across the 50 states, a recently introduced bipartisan and bicameral bill proposes to create a federal privacy regime. Sponsors of the American Data Privacy and Protection Act (ADPPA) say it will set a national baseline for privacy protections and user remedies, while allowing firms to continue to innovate.
The bill’s breadth and onerous requirements could have unintended negative consequences for consumers. Worse, the measure would only partially preempt state law, arguably leaving the worst of both worlds.
Read the full explainer here.
