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PORTLAND, Ore. (Nov. 14, 2022) – As part of the Infrastructure Investment and Jobs Act (IIJA), Congress asked that the Federal Communications Commission prevent discrimination . . .
PORTLAND, Ore. (Nov. 14, 2022) – As part of the Infrastructure Investment and Jobs Act (IIJA), Congress asked that the Federal Communications Commission prevent discrimination in broadband access based on income level, race, ethnicity, color, religion, or national origin, while also taking account of issues of technical and economic feasibility.
But while evaluating discrimination based on race, ethnicity, color, religion, or national origin is relatively straightforward, a new issue brief from the International Center for Law & Economics (ICLE) finds that it is virtually impossible to disentangle the factors affecting the economic feasibility of broadband projects from factors correlated with income.
Income level will influence consumer decisions to adopt broadband, which in turn affects providers’ ability to deploy to a given area, ICLE Senior Scholar Eric Fruits and Director of Innovation Policy Kristian Stout argue. Not only is income a key factor influencing whether a given consumer will adopt broadband, but it is also highly correlated with race, ethnicity, national origin, age, education level, and home-computer ownership and usage, the authors note.
Given this backdrop, as well as recent U.S. Supreme Court precedent regarding “disparate impact” analysis in the context of discrimination law, Fruits and Stout argue that the FCC’s rulemaking against digital discrimination should apply only in cases of intentional discrimination in deployment decisions, and that “mere statistical correlation between deployment and protected characteristics is insufficient to support a finding of discrimination.”
The FCC should also be cautious to avoid creating inefficient bureaucratic processes through which broadband providers would be forced to defend economically justified deployment decisions, as this would make it more difficult to close the so-called “digital divide,” Fruits and Stout write.
“For this reason, FCC rules should articulate a presumption of non-discrimination, in which allegations of digital discrimination must be demonstrated, rather than a presumption of discrimination that must be rebutted for each deployment decision,” the authors write.
A copy of the full report, “The Income Conundrum: Intent and Effects Analysis of Digital Discrimination,” can be downloaded here. To schedule an interview with Eric Fruits or Kristian Stout, please contact ICLE Media and Communications Manager Elizabeth Lincicome at [email protected].
WASHINGTON (Nov. 3, 2022) – As federal agencies move forward with implementing President Joe Biden’s executive order on digital assets, they should remain open to . . .
WASHINGTON (Nov. 3, 2022) – As federal agencies move forward with implementing President Joe Biden’s executive order on digital assets, they should remain open to emerging on-chain privacy solutions and take care not to impose excessive liability on crypto’s “base” layer, International Center for Law & Economics (ICLE) Senior Scholar Miko?aj Barczentewicz argues in comments to the U.S. Treasury Department.
Submitted in response to Treasury’s inquiry on “Ensuring Responsible Development of Digital Assets,” the comments highlight how some base-layer participants of Ethereum responded to the department’s recent addition to the Specially Designated Nationals and Blocked Persons List of a number of Ethereum addresses deployed by Tornado Cash. Given the strict-liability duty not to facilitate transactions with sanctioned entities, many began to filter out transactions that interacted with SDN-listed Ethereum addresses, so that they would not contribute to including those transactions on the blockchain.
But Barczentewicz notes that such filtering is likely to be ineffective, given the ease with which sanctioned entities can obfuscate their identities, and could actually serve to forestall the development of changes to the Ethereum protocol to bypass such filtering.
“Targeting the base layer of permissionless blockchain networks may have symbolic value, but it is unlikely to achieve genuine law-enforcement or national-security goals,” he writes. “Imposing rules with which it would be impossible for base-layer operators to comply will simply push those operators to other jurisdictions.”
He added that it is important that federal agencies determine the appropriate policy response to these privacy-enhancing crypto technologies before there is a clash between more on-chain privacy and current investigative and enforcement methods.
“As Treasury seeks to forward the goals of consumer and investor protection, promotion of access to finance, support of technological advances, and reinforcement of U.S. leadership, all point in favor of facilitating responsible use of privacy-enhancing technologies, including so-called ‘privacy coins,’” Barczentewicz writes.
A copy of the full comments can be downloaded here. To schedule an interview with Miko?aj Barczentewicz, please contact ICLE Media and Communications Manager Elizabeth Lincicome at [email protected].
PORTLAND, Ore. (Nov. 3, 2022) – The digital advertising business has drawn attention from a growing chorus of regulators and competition watchdogs, who argue that . . .
PORTLAND, Ore. (Nov. 3, 2022) – The digital advertising business has drawn attention from a growing chorus of regulators and competition watchdogs, who argue that the market is uncompetitive and dominated by its largest players. A new white paper from the International Center for Law & Economics (ICLE) examines those claims, finding that, rather than the monopolistic effects of rising prices and restricted output, digital advertising has become cheaper and more effective—evidence of vibrant competition.
Inquiries into advertising technology, or “ad tech,” have been launched on both sides of the Atlantic in recent years. Most notably, the State of Texas and nine other U.S. states (later joined by five more states) filed suit in December 2020 against Google alleging anticompetitive conduct related to the company’s online display-advertising business. It has been reported that the U.S. Justice Department (DOJ) may also bring a similar lawsuit before the end of the year. In addition, Sen. Mike Lee (R-Utah) and three bipartisan cosponsors earlier this year introduced the Competition and Transparency in Digital Advertising Act, which would require some of the largest Internet firms to break up their digital advertising businesses.
But according to white paper authors Geoffrey A. Manne and Eric Fruits, the key claims made against Google’s activities in digital advertising are based on a misunderstanding of U.S. antitrust law, or of the details of the digital advertising market itself. They note that digital advertising intermediaries like Google, Facebook and, to a growing extent, Amazon, that are vertically integrated into some or all components of the digital advertising “stack” of services use the prices charged to each side of the market to optimize overall use of the platform.
“As a result, pricing in these markets operates differently than pricing in traditional markets: pricing on one side of the platform is often used to subsidize participation on another side of the market, increasing the value to all sides combined,” Fruits and Manne write. “Consequently, pricing (or other terms of exchange) on one side of the market may appear to diverge from the competitive level when viewed for that side alone.”
The overall effect, they observe, has been falling prices: the Producer Price Index for Internet advertising sales is about 25% lower today than in 2010. In addition, major firms’ investments in ad tech and targeted ads have increased the effectiveness of digital advertising, making it more likely than ever that a given ad served to a given consumer will generate a response. Indeed, the authors contend that the digital advertising market’s history is one of dynamic innovation, with many new developments arising to solve problems created by previous innovations, address new innovations, and respond to market developments.
“U.S. antitrust law is intended to foster innovation that creates benefits for consumers, including innovation by incumbents,” Fruits and Manne write. “The law does not proscribe efficiency-enhancing unilateral conduct on the grounds that it might also inconvenience competitors, or that there is some other arrangement that could be ‘even more’ competitive.”
A copy of the full report, “The Antitrust Assault on Ad Tech: A Law & Economics Critique,” can be downloaded here. To schedule an interview with ICLE President Geoffrey A. Manne or Senior Scholar Eric Fruits, please contact ICLE Media and Communications Manager Elizabeth Lincicome at [email protected].
PORTLAND, Ore. (Oct. 7, 2022) — An executive order announced today by President Joe Biden to establish a new Privacy Shield framework marks an important next step in . . .
PORTLAND, Ore. (Oct. 7, 2022) — An executive order announced today by President Joe Biden to establish a new Privacy Shield framework marks an important next step in urgent negotiations to maintain transatlantic data flows between the United States and European Union that power an estimated $333 billion in annual trade of digitally enabled services, according to scholars with the International Center for Law & Economics (ICLE).
The order had been awaited since March, when U.S. and EU officials reached an agreement in principle on a new Privacy Shield, which EU officials insist must address concerns about surveillance practices by U.S. agencies. It will now be submitted to a months-long ratification process by the European Commission but, like earlier agreements, could also face legal challenges, ICLE Senior Scholar Miko?aj Barczentewicz said.
“It is urgent that agreement on an effective Privacy Shield be reached expeditiously, as EU citizens already face the potential to lose access to services like Google Analytics and Facebook, not to mention the potential disruption to financial services like insurance and payments networks,” Barczentewicz said. “What will be crucial is that the U.S. proposal addresses the two aspects the EU expects to be covered: redress for EU citizens and assurances that U.S. data-surveillance practices are ‘necessary and proportionate.’ We can hope that the EU courts will be reasonable, but litigation is all-but-certain.”
For more on the issue, see the ICLE issue brief “The Great Transatlantic Data Disruption,” as well as this ICLE explainer on the importance of data flows to the financial services sector. Reporters interested in interviewing Miko?aj Barczentewicz or other ICLE scholars should contact ICLE Media and Communications Manager Elizabeth Lincicome at [email protected].
PORTLAND, Ore. (Oct. 4, 2022) – Germany’s system of “sectoral bargaining”—in which unions representing all workers in a given sector bargain over the terms of . . .
PORTLAND, Ore. (Oct. 4, 2022) – Germany’s system of “sectoral bargaining”—in which unions representing all workers in a given sector bargain over the terms of employment for all firms in that sector—has drawn growing interest from some quarters in the United States. But a new issue brief from the International Center for Law & Economics (ICLE) examines the legal and practical issues that would arise should U.S. policymakers seek to import the German model to these shores.
Advocates for sectoral bargaining argue that it is better for workers and can even protect the economy from adversarial labor-market disputes, claims that were examined in an earlier ICLE issue brief by Matthias Jacobs of Bucerius Law School and Matthias Münder of the law firm Schramm Meyer Kuhnke.
But as ICLE Senior Scholar Julian Morris and Director of Innovation Policy Kristian Stout note, the proportion of German employees working under a sectoral-bargaining agreement has fallen by more than 35% since 1996, with the reduction driven by the changing nature of work and increasing exposure of German markets to international competition.
“In an environment of international competition, Germany’s model required all manner of tweaks in order to make it ‘work.’ Even then, Germany’s rate of economic growth has been considerably lower than that of the United States,” Morris and Stout write, adding that the gap in per-capita output between Germany and the United States has increased from less than $2,000 in 1991 to more than $10,000 in 2021.
Nonetheless, proposals for German-style sectoral bargaining have proliferated in recent years. California recently passed the Fast Food Accountability and Standards Recovery Act (FAST Act), which applies important features of European sectoral-bargaining models to the state’s fast-food sector. Sectoral-bargaining proposals have also been floated in Illinois, Connecticut, and New York State, and several candidates in the 2020 U.S. Democratic Party presidential primaries forwarded proposals for labor-market reforms that were based explicitly on such ideas.
Sooner or later, Morris and Stout write, such proposals are bound to run headlong into U.S. antitrust law, which broadly prohibits competitors from coordinating their behaviors in ways that set prices or cause anticompetitive harm to consumers. Any attempt to bring sectoral bargaining to the United States would therefore need either an explicit statutory exemption from Congress or to qualify for one of the existing non-statutory exemptions, the authors argue.
“As the United States heads further into unstable economic times, it would be unwise to adopt a bargaining model that would make its labor market less flexible and more subject to the disruptive effects of competition from overseas and from new technology,” Morris and Stout write.
The full white paper is here. Journalists interested in interviewing ICLE scholars about the law & economics of sectoral bargaining should contact ICLE Editor-in-Chief R.J. Lehmann at [email protected] or 908-265-5272.
PORTLAND, Ore. (Sept. 27, 2022) — The International Center for Law & Economics (ICLE) today announced that Elizabeth Lincicome has joined the institute as media . . .
PORTLAND, Ore. (Sept. 27, 2022) — The International Center for Law & Economics (ICLE) today announced that Elizabeth Lincicome has joined the institute as media and communications manager.
Prior to joining ICLE, Elizabeth was the marketing and development writer at the Competitive Enterprise Institute. She has also done communications and media-relations work for such public-policy research organizations as the Heritage Foundation, the R Street Institute, the Texas Public Policy Foundation, and the North Carolina Institute for Constitutional Law.
Her previous roles include working as a writer and off-air political producer for CBS News, where she covered the 2002 midterm elections, and as an associate producer and researcher for CNN’s White House unit. She was also a staff writer for The Hill newspaper and a publicist for Regnery Publishing Inc., both in Washington, D.C.
“Elizabeth is a seasoned communications professional with more than two decades of experience, most it in the nonprofit public-policy sector,” ICLE President Geoffrey Manne said. “We are excited about the help she can offer the team in garnering broader attention for ICLE scholars and for law & economics scholarship.”
Lincicome received her bachelor’s degree in public policy from Duke University and a master’s in communications from Johns Hopkins University. In her spare time, she enjoys spending time with her family, running, golfing, swimming, and writing freelance pieces for various publications across North Carolina, where she currently resides.
ST. PETERSBURG, Fla. (Sept. 26, 2022) — As Hurricane Ian appears likely to intensify to a major hurricane of Category 3 or higher before making . . .
ST. PETERSBURG, Fla. (Sept. 26, 2022) — As Hurricane Ian appears likely to intensify to a major hurricane of Category 3 or higher before making landfall somewhere on the Florida Peninsula or Panhandle later this week, International Center for Law & Economics (ICLE) Editor-in-Chief and Senior Fellow R.J. Lehmann is available to discuss the storm’s potential impact on the deeply indebted National Flood Insurance Program (NFIP) and the already-fragile Florida homeowners insurance market.
“Lawmakers both in Congress and the Florida Legislature have been warned for years that this day was coming, but have failed to muster the political will needed to adopt reforms,” Lehmann said. “In the case of the NFIP, Congress repeatedly has kicked the can down the road for five years with a series of short-term extensions. In the meantime, the program has made no progress on paying down the $20.5 billion it still owes the Treasury after having $16 billion of debt forgiven in 2017.”
“In Florida, the litigation crisis has left the market in a state of full-blown collapse, with a string of domestic insurers either having ceased writing new business or been taken into receivership, while a decade of efforts to shrink the state-backed Citizens Property Insurance Corp. are now almost completely reversed,” added Lehmann, a resident of St. Petersburg, Fla. “Lawmakers had ample warning about the need to act during the legislative session earlier this year, but they displayed more interest in waging culture-war battles than in helping Floridians to secure their lives and their property.”
For more on the Florida insurance crisis, see this piece R.J. wrote in March for Insurance Journal. For more on proposals to reform the NFIP, see his May 2021 testimony to the U.S. Senate Banking Committee. Journalists interested in interviewing R.J. can contact him at [email protected] or 1-908-265-5272.
LUXEMBOURG CITY (Sept. 14, 2022) — The International Center for Law & Economics (ICLE) today expressed disappointment with the decision by the General Court of . . .
LUXEMBOURG CITY (Sept. 14, 2022) — The International Center for Law & Economics (ICLE) today expressed disappointment with the decision by the General Court of the European Union largely upholding the European Commission’s 2019 decision that terms imposed by Google parent Alphabet on manufacturers of Google Android mobile devices abused what the Commission deemed a dominant market position.
The following quote may be attributed to ICLE Director of Competition Policy Dirk Auer:
“Today’s ruling is a strong endorsement of the formalistic approach to competition law that has been a hallmark of Margrethe Vestager’s tenure. However, the upper court in Luxembourg has repeatedly rebuked this vision of competition enforcement, in favor of a more economically driven approach. There is thus every reason to believe Alphabet will appeal the ruling, and the outcome of those proceedings is anything but a foregone conclusion. The upshot is that, while the Commission may have won today’s battle, this merely sets up a deeper conflict surrounding the future direction of European competition law.”
For in-depth analysis of the original Commission ruling, see the February 2020 ICLE white paper “Making Sense of the Google Android Decision.” Journalists interested in interviewing Auer or other ICLE scholars about the decision should contact ICLE Editor-in-Chief R.J. Lehmann at [email protected] or 1-908-265-5272.
PORTLAND, Ore. (Sept. 13, 2022) — The International Center for Law & Economics (ICLE) today announced that Daniel Gilman has joined the institute as a . . .
PORTLAND, Ore. (Sept. 13, 2022) — The International Center for Law & Economics (ICLE) today announced that Daniel Gilman has joined the institute as a senior scholar of competition policy.
Prior to joining ICLE, Dan spent 16 years as an attorney-advisor in the Federal Trade Commission (FTC) Office of Policy Planning, where he worked on competition issues in health-care and technology markets and, more broadly, on the competitive impact of regulation, with a focus on privacy regulations, among others.
During a leave from the FTC in the 2014-2015 academic year, Dan visited Harvard Law School as the Victor H. Kramer Foundation Fellow in antitrust law and economics. He previously was a visiting professor of law at the University of Maryland School of Law, where he taught law and economics and health and science law.
“We are thrilled to have the opportunity both to work with Dan and to learn from him,” ICLE President and Founder Geoffrey Manne said. “Few can match his combined expertise both as a scholar of competition law and as a practitioner.”
Dan has also taught at Georgetown University Law Center, Penn State University College of Medicine, and at Washington University in St. Louis. He also has experience in private practice with Hogan & Hartson LLP in Washington, D.C.
“I’m excited to join the team at ICLE,” Giman said. “It’s an ideal place for me to continue the work at the heart of my career: economically grounded research and advocacy on competition policy and regulation, in the service of consumer welfare.”
Dan’s work has been published in such academic journals as Georgetown Law Journal, American Journal of Law & Medicine, Nursing Economics, the Journal of Health Care Law & Policy, Behavioral & Brain Sciences, and the British Journal for the Philosophy of Science. He holds a law degree from Georgetown, a PhD in philosophy from the University of Chicago, and an undergraduate degree from Dartmouth College.