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Scholarship Many people hope that data interoperability can increase competition, by making it easier for customers to switch and multi-home across different products. The UK’s Open . . .
Many people hope that data interoperability can increase competition, by making it easier for customers to switch and multi-home across different products. The UK’s Open Banking is the most important example of such a remedy imposed by a competition authority, but the experience demonstrates that such remedies are unlikely to be straightforward. The experience of Open Banking suggests that such remedies should be applied with focus and patience, may require ongoing regulatory oversight to work, and may be best suited to particular kinds of market where, like retail banking, the products are relatively homogeneous. But even then, they may not deliver the outcomes that many hopes for.
Data portability and interoperability tools allow customers to easily move their data between competing services, either on a one-off or an ongoing basis. Some see these tools as offering the potential to strengthen competition in digital markets; customers who feel locked in to services that they have provided data to might be more likely to switch to competitors if they could move that data more easily. This would be particularly true, advocates hope, where network effects grant existing services value that new rivals cannot emulate or where one of the barriers to switching services is the cost of re-entering personal data.
The UK’s Open Banking system is one of the most mature and important examples of this kind of policy in practice. As such, the UK’s experience to date may offer useful clues as to the potential for similar policies in other markets, for which the UK’s Furman Report has cited Open Banking as a model. But fans of interoperability sometimes gloss over the difficulties and limitations that Open Banking has faced, which are just as important as the potential benefits.
In this article, I argue that Open Banking provides lessons that should both give hope to optimists about data portability and interoperability, as well as temper some of the enthusiasm for applying it too broadly and readily.
I draw on my experiences as part of the team that produced the industry review “Open Banking: Preparing For Lift Off” in 2019. That report concluded that Open Banking, though promising, needed several additional reforms to succeed, a few of which I discuss in this piece. I was also the co-author of a white paper that argued for an Open Banking-like remedy in the UK’s retail electricity market, which I discuss briefly below. All views expressed here are my own.
I argue that there are three main lessons to draw from Open Banking for considerations of similar remedies in other markets:
I conclude that Open Banking has not yet led to noticeably stronger competition in the UK banking sector. Implementation challenges suggest that taking an equivalent approach to other markets would require more time, investment and effort than many advocates of interoperability requirements usually concede and may not deliver the anticipated benefits. To the extent that Open Banking is to be a model, it would be best applied as a focused approach in markets that bear particular characteristics and where the costs are outweighed by the benefits, rather than a blanket measure that can be applied to every market where customer data matters.
Read the full white paper here.
Scholarship In a new paper published by the Progressive Policy Institute, ICLE Senior Fellow Dirk Auer and PPI’s Caleb Watney make the case that while the . . .
In a new paper published by the Progressive Policy Institute, ICLE Senior Fellow Dirk Auer and PPI’s Caleb Watney make the case that while the EU desires to be at the forefront of developing regulations to manage emerging issues relevant to artificial intelligence, the European Commission’s leadership have failed to grapple meaningfully with the significant tradeoffs that regulation of these new technologies entails.
Scholarship The Internet is a fabulous means of communication. However, the Digital Fuel Monitor by Rewheel/research is a prime example of misinformation on the Internet
The dissemination of false information online has become a serious challenge. Adding to this problem are the false claims put forth by Rewheel.
The Internet is a fabulous means of communication. However, the Digital Fuel Monitor by Rewheel/research is a prime example of misinformation on the Internet. To curb the spread of false information, social media platforms have started applying warning labels to content they believe the facts do not support. Still, far too many false claims have attracted attention because separating fact from fiction on the Internet often requires a specific expertise. In this paper, the authors apply their expertise about mobile wireless markets to expose the false claims put forth by Rewheel/research in the recent publication of its Digital Fuel Monitor. We find the Rewheel rankings to lack academic rigor owing to an unsuitable analytical concept, unrealistic assumptions, and the omission of marketplace realities. Counterintuitive results confirm the rankings’ ineptness.
Rewheel, a Finnish consultancy, periodically issues reports that it portrays as international competitiveness comparisons of retail prices for mobile wireless services across the globe; however, these comparisons are not accurate representations of the state of competition in the mobile wireless world. In these reports, Rewheel assigns providers and countries international ranks and various competitive labels. For example, Rewheel ranks a country with alleged high prices a laggardand considers itleast competitive. Conversely, countries that Rewheel views favorably obtain a most competitive ranking. As with much of the information on the Internet, Rewheel follows the freemiummodel. That is, it publishes attention grabbing headlines and some colorful charts for free, but anyone seeking to understand more about the derivation of the data must pay Rewheel’s fees for the full content.
Mirroring much of the free content on the Internet, Rewheel’s rankings are unscientific and erroneous. Unfortunately, this contributes to the spread of misinformation about the state of competition in mobile wireless markets. Rewheel should be subject to the same warning labels as those placed on other suspicious information. Before turning to the shortfalls of the Rewheel rankings, we highlight that valid inferences regarding the competitiveness of mobile wireless service provisioning in a country cannot be made from a simple, unadjusted ranking of international prices. Countries differ in many aspects including network quality, consumer preferences, income, regulatory and legal environment, factors of production costs, and market size. These and many other differences among jurisdictions contribute to price variations. A proper international comparison considers these factors and compares the value proposition not simply prices.
In its recent ranking exercise, Rewheel ranks providers and countries by purportedly averaging the retail prices of 10 retail service plans. The 10 plans include five smartphone plans on 4G or 5G networks with varying levels of voice allowances, data allowances, and download speeds. Rewheel also includes three mobile broadband data-only plans and two home broadband (fixed wireless) plans. This exercise finds an average of €109 (US$127) for Canadian mobile wireless providers TELUS, Bell, and Rogers. Rewheel sweepingly declares that these providers offer “the least competitive monthly prices.” With an average price of €29 (US$34), Finnish provider Elisa wins Rewheel’s distinction of offering “the most competitive … monthly prices.” The Rewheel story is easy to understand. It is also completely wrong.
Rewheel bases its rankings on a meaningless concept that offers no economic market insights.
Comparing the prices of a collection of products (baskets) is not new. Prior to the introduction of the Internet, analysts used basket prices to compare supermarket prices. That is, they compared the costs of identically filled shopping carts across supermarkets. However, Rewheel’s application of the basket method is not appropriate for comparing prices of different mobile wireless services. Rewheel created its own version of the basket method that includes the calculation of meaningless averages, random combinations of different services, improper assumptions, and factual errors. Not surprisingly, as evidenced by the results derived by Rewheel, the rankings are incorrect and counterintuitive. We find Rewheel’s rankings are of no value in comparing prices and assessing the level of competition in wireless markets.
Comparing total grocery bills for two identical shopping carts from two different supermarkets might be a rational approach. However, knowing the average price of the items in the shopping cart clearly is useless especially when including a wide range of items. Nevertheless, Rewheel does just that – it compares average prices across varying items (in this case services). Knowing that the average price of a certain T-Mobile USA smartphone, tablet, and home Internet plan is €106 (US$125) is about as useless as knowing that the average price per item in a shopping basket containing a six-pack of beer, a dozen eggs, and a pound of oranges is US$10.
Rewheel’s assumptions are unsupported and create distorted rankings. Rewheel mixes prices from different providers and ignores market realities.
Rewheel does not explain why it would make sense to take the average of five smartphone plans, three data-only plans, and two wireless home Internet plans. Grocery bills are the sum of all items purchased at the supermarket. Presumably, consumers need all these items in their daily life. As such, the total grocery bill measures the household expenditure for food. Rewheel’s basket, however, does not represent anything. It does not represent an individual’s spending for mobile wireless services because subscribers do not need five smartphone plans. Subscribers also do not rely heavily on wireless home Internet access. Instead, the more prevalent means to access the Internet is through fixed broadband services offered by landline telephone and cable TV companies. Yet, fixed broadband services are missing from Rewheel’s basket. Thus, the average of Rewheel’s eclectic mix of services is meaningless. It certainly does not represent a consumer’s wireless spending, and it does not represent the average price of a particular service. Rather, the Rewheel basket is a mix of substitute and complementary items. Moreover, Rewheel’s basket overlooks an important item (fixed broadband) on a consumer’s shopping list.
The must-carry assumption. Rewheel assumes that in order for markets to be competitive all providers in the world mustoffer all 10 service plans in its basket. If a provider does not offer a specific plan, then that provider is “assigned the highest monthly price among all 168 operators.” For example, per Rewheel, Vodafone in India does not offer a fixed wireless broadband plan with at least 1,000 GB of data and download speeds of 100 Mbps or faster. Therefore, under the must-carry assumption, Rewheel artificially increases Vodafone India’s price average by loading it with the highest observed international value for this plan. In this case, the highest monthly price that Rewheel found belongs to a provider in the United Kingdom by the name of EE Limited (formerly Everything Everywhere). Thus, Vodafone India’s average includes a plan price from the United Kingdom. Rewheel applies this exact price to no less than 133 of the 168 providers (79 percent) in its ranking.
Rewheel’s irrational assumption is akin to imputing that the price of buffalo meat in a vegetarian supermarket is the same as the price of the most expensive buffalo meat vendor in the world. There is no economic or statistical support for this approach. In fact, in some countries, Rewheel’s must-carry plans cannot even be offered because the regulator has yet to release 5G spectrum. Rewheel’s baseless assumption renders the comparison useless because the average price by which providers and countries are ranked is not composed of retail prices faced by subscribers in the respective markets.
The non-specialization assumption. Rewheel’s ranking unrealistically assumes that for a provider (and thus the market) to be competitive it must not specialize but must offer and compete on all plan levels selected by Rewheel. This assumption is counter to basic economic principles.
A rational business enterprise introduces service plans for the express purpose of earning positive economic profit. Based on this objective, an enterprise derives a strategy that determines its retail offerings. Unlike Rewheel’s assumption, this does not mean that all competing enterprises offer the same services. Quite the contrary, competitors seek to distinguish themselves from their peers through price and non-price service attributes and by offering new and innovative services to gain a competitive advantage.
Consider, for instance, Freedom Mobile Inc., a Canadian regional mobile wireless provider owned by Shaw Communications, a Canadian cable provider. Freedom does not offer fixed wireless broadband services. Rewheel incorrectly deduces from this observation that Freedom’s offerings are not competitive. Freedom is a profit-maximizing firm; therefore, its decision not to offer fixed wireless services is simply an indication that the service does not align with the company’s strategic blueprint. Freedom finds that it can best compete by specializing in offering mobile wireless services in select regions of Canada. Rewheel’s approach also overlooks service providers that mainly specialize in fixed wireless broadband, like Xplornet, which is not listed among Canada’s providers.
The standalone assumption. Rewheel incorrectly assumes that consumers demand and are supplied with standalone only plans. In Rewheel’s ranking system, there is no demand for bundled service plans where a consumer purchases mobile wireless service along with TV, fixed Internet, or fixed telephony services. However, in reality, many subscribers bundle their services and thereby receive discounts on mobile wireless and broadband services. Relatedly, mobile wireless providers offer bundled services to competitively distinguish themselves. For instance, AT&T offers free HBO Max subscriptions to some of its customers. By ignoring bundled offerings and discounts, Rewheel overstates actual consumer expenditures.
The no-sharing assumption.The Rewheel ranking exercise also contains the untenable assumption that the increment of demand is always one mobile phone line and never more, which is false. For instance, AT&T offers unlimited plans starting at US$30 “when you get 5 lines.” Rewheel ignores this US$30 price point. Instead, it uses a US$65 price point, which is AT&T’s lowest price for an unlimited plan with a single line. Yet, as of 2015, an estimated 68 percent of US subscribers were part of a shared or family plan. By ignoring the fact that subscribers purchase in increments of more than one line, Rewheel significantly overstates US prices.
Specifically, instead of the US$65 price assumed by Rewheel, the average price of AT&T’s cheapest unlimited plan is closer to US$41. For this example alone, Rewheel’s assumption results in an overstatement of prices by 58 percent. The popularity of shared plans in the United States is not the exception. In Canada, approximately half of mobile wireless subscribers purchase a plan shared with others.
The price-only assumption.Rewheel’s incorrect ranking assumes that consumers only care about price and not what they get in exchange for their money. In building its average, Rewheel looks for the price of the cheapest plan that meets or exceeds its selection criteria. The plans offered by different providers exceed the selection criteria by different amounts. Yet, Rewheel ignores this fact and creates an apples-to-oranges comparison where consumers do not care about anything but price. Omitting the value of additional minutes, data allowances, or faster download speeds is not realistic.
A real-world example illustrates the consequences of this baseless assumption. Koodo is a mobile wireless provider in Canada that is part of the TELUS family of brands. The cheapest Koodo plan that meets Rewheel’s criteria for its first plan (i.e., Smartphone: 4G&5G, 100 mins, 1 GB, 1 Mbps) is a plan priced at US$22. Now, consider the Irish mobile wireless provider called 3 whose plan meets or exceeds the same Rewheel criteria and is priced at US$17. Rewheel heralds 3 as a cheap provider and labels TELUS as “least competitive.” Table 1 provides the details of these two plans.
As the table reveals, for an additional US$5 per month (not withstanding other differences), Koodo offers download speeds that exceed those offered by 3 by a factor of over four. By ignoring non-price service attributes, Rewheel assigns a least competitive label on Koodo and a most competitivelabel on 3, thereby incorrectly assuming that consumers do not care about network quality and that they would not be willing to pay for a higher speed. Presumably, Rewheel would also argue that consumers are not willing to pay more for high-grade Japanese wagyu beef than they would pay for a cheaper cut of beef.
The cost-equality assumption.Rewheel also ignores that building a network costs money. Rewheel unrealistically assumes that building a network in Finland (which Rewheel highlights as a competitive market) costs the same as building a network in Canada (which Rewheel highlights as a noncompetitive market) even though Finland has a population one-sixth the size of Canada and a landmass one twenty-ninth the size of Canada. Finnish mobile wireless providers also pay about 90 percent less for radio spectrum relative to their Canadian peers. For a business enterprise to remain viable, it must recover its costs and earn a competitive return. Because all providers face buildout and spectrum costs, they are reflected in the retail prices for mobile wireless services. Yet, in Rewheel’s utopian world, all providers face the same costs.
Rewheel’s results are counterintuitive and confirm that a flawed concept and unreasoned assumptions guarantee incorrect findings.
The counterintuitive results.Two simple examinations demonstrate that Rewheel’s results are incorrect and offer no economic insight. First, we retraced Rewheel’s construction of the ranking average for one mobile wireless provider, that is, TELUS, a mobile wireless provider in Canada, which offers three brands – TELUS, Koodo, and Public Mobile. Examining the websites of the TELUS family of brands reveals that across the three brands TELUS only offers two of the 10 specific plans that Rewheel uses for its average. Specifically, as shown in Table 2, Koodo offers a plan at US$22.33 that meets and exceeds the first Rewheel plan (i.e., Smartphone, 4G&5G, 100 minutes, 1 GB, 1 Mbps). Koodo also offers a plan at US$55.81 that meets and exceeds the second Rewheel plan (i.e., Smartphone, 4G&5G, 1000 minutes, 10 GB, 10 Mbps). The TELUS brands do not offer any of Rewheel’s other eight specific plans although TELUS offers many other plans.
Rewheel ignores the fact that it misses 80 percent of the sample and simply substitutes the missing data points with “the highest monthly price among 168 operators.” The data provided by Rewheel in its free Public Version on the Internet does not disclose what prices it used in every instance where a provider did not offer a plan. However, it is possible to ascertain that for the ninth plan (i.e., fixed wireless broadband plans with at least 1,000 gigabytes and 100 Mbit/s peak speed) Rewheel used US$88.37, which is the price for the most expensive plan that Rewheel found for this plan type. EE Limited in the United Kingdom supposedly offers this plan. For the sixth sample plan, Rewheel blends a price point of US$116.28 from Rogers, another Canadian mobile wireless provider, into TELUS’ average.
As the TELUS example demonstrates, Rewheel’s ranking is pure fiction. Aside from its theoretical failings and the fact that it misses the plans purchased by 50 percent of Canadians, Rewheel observes only two data points for TELUS, which average €34 (US$39). Based on Rewheel’s ranking, an average of €34 would put TELUS in third place out of 168 providers, which would appear to make it one of the most competitive mobile wireless providers in the world. However, Rewheel reports TELUS’ average at €109 (US$127), which is purely an artifact of Rewheel’s methodology that assigns TELUS the highest price for eight out of 10 sample plans – plans that TELUS does not even offer.
Second, in Rewheel’s world where only price matters, one would not expect providers with the most competitive monthly prices to be in the same market as providers with the least competitive prices. The reason for this is simple. Like any other rational economic agent, subscribers would not select a more expensive plan over an identical but less expensive plan. However, the myriad of unreasonable assumptions in Rewheel’s ranking produces this counterintuitive result.
Consider the case of Romania where Rewheel calculates average prices of US$69, US$70, US$122, and US$123 for Orange, Vodafone, RCS-RDS, and T-Mobile, respectively. In the same order, per Rewheel, these prices would rank the four providers as 23, 25, 141, and 146. This ranking presumably offers Orange and Vodafone a label of most competitive, whereas RCS-RDS and T-Mobile are least competitive. If the Rewheel price-only world were accurate, RCS-RDS and T-Mobile would not have sustainable business cases because Orange and Vodafone allegedly offer better prices and thus would attract all market demand. Nevertheless, the actual market shares in Romania tell a different story. RCS-RDS and T-Mobile have market shares of 12.6 percent and 18.7 percent, respectively. It is counterintuitive that two alleged highly uncompetitive providers would attract about one-third of the country’s subscribers. We observed similar anomalies in other countries, including Finland, Switzerland, the United States, and the UK. These economic anomalies are prima facie evidence that Rewheel’s results are incorrect.
Rewheel’s Digital Fuel Monitor needs a warning label.
The warning label. Given the many theoretical and practical flaws and errors contained in the Rewheel study, we find it of no value when comparing prices internationally or establishing the level of competition in a country. A warning label informing readers about the lack of intellectual rigor and the misleading and incorrect nature of the Rewheel study’s results is appropriate and recommended.
[*] NERA Economic Consulting received financial support from TELUS Communications Corporation for the research and initial drafting of this paper. No other authors received compensation. All views expressed are those of the authors.
 See Rewheel/research, “4G&5G connectivity competitiveness 2020,” Digital Fuel Monitor, Rewheel research PRO study (Public Version), November 2020 (hereinafter Rewheel).
 Ibid, p. 1.
 See AT&T “Stream HBO Max with some AT&T unlimited plans,” https://www.att.com/support/article/wireless/KM1261921/.
 See AT&T Wireless Plans, https://www.att.com/plans/wireless/.
 See Pew Research Center, “U.S. Smartphone Use in 2015, Chapter One: A Portrait of Smartphone Ownership,” p. 2.
 30*0.68+65*0.32 = 41.20.
 For example, Rewheel collected “4G&5G mobile broadband plans with at least 100 gigabytes and 50Mbit/s peak speed” plans. (Rewheel, p. 3, (emphasis added).)
 See Koodo Prepaid Plans, https://www.koodomobile.com/prepaid-plans?INTCMP=KMNew_NavMenu_Shop_PrepaidPlans. Rewheel 2H 2020 State of Broadband Pricing, October 2020, p. 18.
 See 3 Prepay Plans, https://www.three.ie/buy/prepay.html#prepay-phone-plans; see also Rewheel 2H 2020 State of Broadband Pricing, October 2020, p. 18.
 Rewheel, p. 1.
 See Richard Marsden, Dr. Bruno Soria, and Hans-Martin Ihle, “Effective Spectrum Pricing: Supporting better quality and more affordable mobile services,” GSMA, February 2017, Figure 13.
 Rewheel, p. 11.
 Shares are for third quarter 2019 just prior to Rewheel’s data collection. (See TeleGeography, Country Profile, Romania, as of November 9, 2020, p. 32).
Scholarship Legal decision-making and enforcement under uncertainty are always difficult and always potentially costly. The risk of error is always present given the limits of knowledge, but it is magnified by the precedential nature of judicial decisions.
Legal decision-making and enforcement under uncertainty are always difficult and always potentially costly. The risk of error is always present given the limits of knowledge, but it is magnified by the precedential nature of judicial decisions: an erroneous outcome affects not only the parties to a particular case, but also all subsequent economic actors operating in “the shadow of the law.” The inherent uncertainty in judicial decision-making is further exacerbated in the antitrust context where liability turns on the difficult-to-discern economic effects of challenged conduct. And this difficulty is still further magnified when antitrust decisions are made in innovative, fast- moving, poorly-understood, or novel market settings—attributes that aptly describe today’s digital economy.
Scholarship After the rise of the precautionary principle (or approach) in the late 1990s in a number of jurisdictions, the economic consequences of this newly created principle of law have unfolded.
After the rise of the precautionary principle (or approach) in the late 1990s in a number of jurisdictions, the economic consequences of this newly created principle of law have unfolded. Such consequences were either acclaimed – for providing a minimisation of a number of externalities – or lambasted – for providing justificatory grounds for the prohibition of potentially propitious innovations due to the existence of scientific uncertainties.
Whereas innovation has increasingly become of salient importance in today’s economies, European economies face sluggish economic growth rates partly caused by a regulatory framework where risk-aversion is incentivized. The precautionary principle induces and favours risk-aversion at the expense of innovation.
This Article discusses the law and economic foundations and implications of the precautionary principle in the WTO, the European Union, France and the United Kingdom. Having introduced the importance of law in stifling innovation and discussed the current precautionary principle, this Article vouches for an innovation principle to come to the fore in order to counterbalance the innovation-costly precautionary principle. A number of recommendations are proposed at the end of the article.
ICLE White Paper Summary The relationship between classical liberalism and technology is surprisingly fraught. The common understanding is that technological advance is complementary to the principles of classical . . .
The relationship between classical liberalism and technology is surprisingly fraught. The common understanding is that technological advance is complementary to the principles of classical liberalism – especially in the case of contemporary, information-age technology. This is most clearly on display in Silicon Valley, with its oft-professed libertarian (classical liberalism’s kissing cousin) affinities. The analytical predicate for this complementarity is that classical liberalism values liberty-enhancing private ordering, and technological advance both is generally facially liberty-enhancing and facilitates private ordering.
This analysis, however, is incomplete. Classical liberalism recognizes that certain rules are necessary in a well-functioning polity. The classical liberal, for instance, recognizes the centrality of enforceable property rights, and the concomitant ability to seek recourse from a third party (the state) when those rights are compromised. Thus, contemporary technological advances may facilitate private transactions – but such transactions may not support private ordering if they also weaken either the property rights necessary to that ordering or the enforceability of those rights.
This chapter argues that technological advance can at times create (or, perhaps more accurately, highlight) a tension within principles of classical liberalism: It can simultaneously enhance liberty, while also undermining the legal rules and institutions necessary for the efficient and just private ordering of interactions in a liberal society. This is an important tension for classical liberals to understand – and one that needs to be, but too rarely is, acknowledged or struggled with. Related, the chapter also identifies and evaluates important fracture lines between prevalent branches of modern libertarianism: those that tend to embrace technological anarchism as maximally liberty-enhancing, on the one hand, and those that more cautiously protect the legal institutions (for example, property rights) upon which individual autonomy and private ordering are based, on the other.
This chapter proceeds in four parts. Part I introduces our understanding of classical liberalism’s core principles: an emphasis on individual liberty; the recognition of a limit to the exercise of liberty when it conflicts with the autonomy of others; and support for a minimal set of rules necessary to coordinate individuals’ exercise of their liberty in autonomy-respecting ways through a system of private ordering. Part II then offers an initial discussion of the relationship between technology and legal institutions and argues that technology is important to classical liberalism insofar as it affects the legal institutions upon which private ordering is based. Part III explores how libertarian philosophies have embraced contemporary technology, focusing on “extreme” and “moderate” views – views that correspond roughly to liberty maximalism and autonomy protectionism. This discussion sets the stage for Part IV, which considers the tensions that technological change – especially the rapid change that characterizes much of recent history – creates within the classical liberal philosophy. The central insight is that classical liberalism posits a set of relatively stable legal institutions as the basis for liberty-enhancing private ordering – institutions that are generally developed through public, not private ordering – but that technology, including otherwise liberty-enhancing technology, can disrupt these institutions in ways that threaten both individual autonomy and the private ordering built upon extant institutions.
ICLE White Paper "It’s no surprise to anyone that illegal activity happens online. What may be surprising, however, is that one of the central figures in administering core Internet functions is deeply ambivalent (at best) about its role in preventing illicit online activity..."
“It’s no surprise to anyone that illegal activity happens online. What may be surprising, however, is that one of the central figures in administering core Internet functions is deeply ambivalent (at best) about its role in preventing illicit online activity.
Since 1998, the Internet Corporation for Assigned Names and Numbers (ICANN) has been the organization tasked by the U.S. government with overseeing the Domain Name System (DNS). The DNS is the system that enables domain names to resolve — meaning that when you type “google.com” in a browser address window you will reliably receive Google’s search engine each time. That reliability is a boon for Internet users, most of the time. But much mischief can be conducted through web sites, as well, and a system that reliably serves up these sites imposes costs on its users.
Take one recent example. In July 2015, a Bloomberg News piece from “bloomberg.market” indicated that Twitter was in talks over a $31B USD buyout. Naturally, the value of Twitter stock shot up before returning to normal. The problem, however, was that it was a totally fabricated event, one that the currently lax accountability regime underlying the DNS only makes easier.
One would think that ICANN would have effective procedures in place for removing (or otherwise sanctioning) domain names created or used for illegal purposes. However, even though it possesses contractual control over its registries and registrars (the entities responsible for managing and registering top level domains and domain names), the practical reality is that illegal conduct is rarely ever deterred by ICANN.
The consequences of ICANN’s non-action are evident. ICANN has refused to effectively deter content piracy on the Internet, and pirated content currently constitutes something on the order of 25% of Internet traffic. It has also overseen an inexorable increase in websites dedicated to phishing scams. As of December 2014, phishing occurred in 19% of the new gTLDs — and nearly two-thirds of the phishing occurred in just one gTLD (.XYZ). To date ICANN has steadfastly refused to take action despite the significant cost that its refusal — ostensibly rooted in its desire not to regulate Internet content — imposes on community members.
ICANN has an accountability problem.”
ICLE White Paper "Last week the Federal Trade Commission (FTC) settled a privacy case – In the Matter of Nomi Technologies, Inc. – that, on its face, will seem banal, but actually raises significant questions about the FTC’s understanding of its broad consumer protection authority..."
“Last week the Federal Trade Commission (FTC) settled a privacy case – In the Matter of Nomi Technologies, Inc. – that, on its face, will seem banal, but actually raises significant questions about the FTC’s understanding of its broad consumer protection authority, especially as applied to cutting-edge technologies. Nomi is the latest in a long string of recent cases in which the FTC has pushed back against both legislative and self-imposed constraints on its discretion. By small increments (unadjudicated consent decrees), but consistently and with apparent purpose, the FTC seems to be reverting to the sweeping conception of its power to police deception and unfairness that led the FTC to a titanic clash with Congress back in 1980.
Specifically, the Nomi case illustrates that the FTC doesn’t think it needs to establish that a misrepresentation was “material” to consumers before finding a statement deceptive under Section 5 of the FTC Act — the very thing that the FTC’s 1983 Deception Policy Statement (DPS) was intended to prevent. Effectively nullifying the materiality requirement at the core of the DPS means the FTC is more likely to mis-prioritize its limited enforcement resources, proscribe conduct that actually benefits consumers, and impose remedies that make consumers worse off.
Indeed, that appears to be precisely what will happen here: Out of a desire to encourage — effectively require — companies to disclose data collection, the FTC is actually discouraging companies from doing so (at least in the short run), as Commissioners Ohlhausen and Wright note in their dissents. The FTC majority’s blindness to this obvious, but perverse, result suggests that the real purpose of the settlement is strategic: to set a quasi-precedent that the Commission will leverage in the future – probably in harder cases involving more ambiguous conduct – and perhaps also to advance a larger political agenda…”
Scholarship The FTC completed its antitrust investigation of Google early this year and, finding no evidence of antitrust violations, decided not to bring an enforcement action against the company.
The FTC completed its antitrust investigation of Google early this year and, finding no evidence of antitrust violations, decided not to bring an enforcement action against the company. Although the FTC has concluded its investigation, Google’s competitors and critics, unhappy with the outcome, continue to raise issues and criticize the FTC’s decision. In this brief article we discuss the FTC’s decision and assess the merits of the claims still being raised. The critics’ case against Google rests on certain assumptions about how the markets in which it operates function. But these are technology markets, constantly evolving and complex; most assumptions, and even “conclusions” based on data, are imperfect at best. The market realities in which Google operates, while not dispositive, strongly challenge the logic and thus the relevance of many of the contentions still being maintained by Google’s critics.
The public claims by Google’s critics and the best information we have on the thinking of the regulators investigating the company reflect an over-simplified and inaccurate conception of the competitive conditions facing Google and its competitors. The reality is far more complex and, if properly understood, paints a picture that undermines the basic, essential elements of an antitrust case against the company.
Competitors continue to claim that their problems competing with Google are cognizable antitrust problems rather than the consequences of vigorous competition, shifting consumer demand, and their own business decisions. However, there is significant evidence indicating that these claims are unfounded, and the FTC, which undertook the most thorough examination of the issues to date, found unanimously that no antitrust action based on such claims was viable.