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When:

Wednesday, November 17, 2021 from 1:00pm – 2:00pm ET/7:00pm – 8:00pm CET

What:

Join the International Center for Law & Economics for a discussion with two new authors exploring important themes of emerging technologies and decentralization in view of policymakers’ proposed regulatory interventions.

Thibault Schrepel, author of Blockchain + Antitrust: The Decentralization Formula, and Neil Chilson, author of Getting out of Control: Emergent Leadership in a Complex World, will examine the other’s book in light of his own, as well as the implications for issues like blockchain evolution and competition law.

Who:

• Thibault Schrepel, Associate Professor, Department of Transnational Legal Studies, VU Amsterdam University, the Netherlands, and Faculty Affiliate, The CodeX Center, Stanford University
• Neil Chilson, Senior Research Fellow, Technology and Innovation, The Charles Koch Institute
• Moderator: Geoffrey A. Manne, President and Founder, International Center for Law & Economics

Where:

RSVP for the Zoom Webinar here

USA Today – ICLE Director of Law & Economics Programs Gus Hurwitz was quoted by USA Today in a story about platform liability for the sale of counterfeit and defective goods. You can read the full piece (behind a subscribe paywall) here.

While it is illegal under the Consumer Product Safety Improvement Act of 2008 to sell a recalled product, Facebook is merely facilitating the sale. A similar debate has been playing out in numerous court cases, with judges weighing whether Amazon can be held liable for defective or dangerous products sold on its site, said Justin “Gus” Hurwitz, a professor of law at the University of Nebraska-Lincoln who focuses on regulation in the tech world. Amazon has generally been considered responsible only if the item shipped from an Amazon warehouse, Hurwitz said. The fact that Facebook might make a small commission for coordinating some sales likely wouldn’t increase the company’s liability, he said.

“There is no legal framework that would require Facebook to do anything about recalled products,” Hurwitz said. “The issue here is that Facebook isn’t doing the sale. Facebook is only mediating the sales between buyer and seller.”

Hurwitz said the issue dovetails with a larger conversation about content moderation and whether platforms should be responsible for the conduct of their users, whether that be posting misinformation or selling dangerous goods. He said he doubts that debate will result in legislation requiring Facebook to police its marketplace or generate enough public pressure that Facebook takes a more proactive stance on its own. Doing so, he said, could actually invite legal scrutiny.

“Companies could be reasonably worried that if they start policing these products and a dangerous recalled product is sold, that consumers or courts might say, ‘Hey you’re responsible for this. You had told us that you were protecting us,’” Hurwitz said. He added that Facebook might be concerned about “creating liability that does not exist.”

 

Jurist – ICLE President Geoffrey Manne was cited by Jurist in a piece about the recent surge of antitrust enforcement actions against major tech platforms. You can read the full piece here.

False positives are costly, while the fallout from false negatives can be mitigated. As noted by legal expert Geoffrey Manne, monopolized markets encourage “incentives of new entrants to compete for supracompetitive profits” which in turn limits the “social costs of Type II errors more effectively than the legal system’s ability to correct or ameliorate the costs of Type I errors.” In other words, antitrust benefits from restraint. When pro-competitive behavior is outlawed by government regulation or the courts, it may, as Easterbrook warned, “be lost for good.”

Roll Call – ICLE President Geoffrey Manne was quoted by Roll Call in a story about President Joe Biden’s appointments to key technology and antitrust positions. You can read the full piece here.

Geoffrey Manne, president of the International Center for Law and Economics, which advocates limited antitrust regulation of digital platforms, said that when Biden hired Wu to work in the White House, it was an olive branch to progressive Democrats.

“It sort of seemed not like a super important position that would give him a chance to flex his policy muscles, but didn’t seem like it would necessarily indicate anything about the administration’s agenda,” he said. “Now, with Lina as FTC chairwoman and Jonathan at DOJ, it is surprising, and it doesn’t seem to match the campaign rhetoric.”

Whether Biden favors breaking up the technology companies is immaterial, Manne said.

“We’re not talking about Biden anymore,” he said. “We’re talking about Kanter and Tim Wu and Lina Khan. Who cares what Biden personally thinks? He set things in motion that he obviously doesn’t mind happening. And I think those guys are very serious about it.”

PORTLAND, Ore. (Oct. 7, 2021) — A new issue brief published jointly by the International Center for Law & Economics (ICLE) and the Progressive Policy Institute looks at looming threats to transatlantic data flows between the United States and European Union that power an estimated $333 billion in annual trade of digitally enabled services.

The threat comes broadly from the rise of data-localization requirements national rules governing how data is created, stored, and transmitted. Data-localization policies restrict the flow of data across borders and often are justified on privacy or national-security grounds.

The threat of growing data localization has been thrown into stark relief by the Court of Justice of the European Union’s  July 2020 decision in the Schrems II decision, which invalidated the EU–US Privacy Shield that had previously governed data flows between the two jurisdictions. While U.S. and EU negotiators are seeking a replacement framework, the European Data Protection Supervisor has vowed to monitor EU jurisdictions’ compliance with the ruling.

By one estimate, even modest changes increasing the EU’s data-localization requirements would result in a €116 billion reduction in exports. And there are reasons to believe this is an underestimate, given the difficulty in quantifying the value of digital services. One implication of these measurement difficulties—authors Kristian Stout, Michael Mandel and Miko?aj Barczentewicz find, is that the impact of data-flow disruptions is likely to be far greater than the large effects discovered through traditional measurement suggest.

“Global data flows have facilitated the creation of larger, more efficient worldwide networks that optimize time use by firms and individuals, and the development of resilient networks that can withstand shocks to the system like the COVID-19 pandemic,” the authors write.

The paper concludes with recommendations to the U.S. and EU negotiating parties to consider longer-term trade and policy changes that take seriously the role of data flows in the world economy.

The issue brief, “The Great Transatlantic Data Disruption: The damage of data localization after Schrems II,” can be downloaded here. Media interested in interviewing ICLE Director of Innovation Policy Kristian Stout to discuss the paper’s findings may reach him at [email protected] or (732) 690-0375.

The International Centre for Law & Economics (ICLE) seeks to commission one or more detailed studies into the effects of targeted advertising on competition, innovation, and consumer welfare in the wider economy.

Funding Priorities

While contemporary debates about targeted online ads have considered the effect of data collection on user privacy, publishers, and the ad intermediaries themselves, the effects of ad targeting on the companies that use these ads, the markets they operate in, and the consumers who purchase advertised products are less widely discussed and well-understood. 

We are particularly interested in work that explores the following areas:

1. The effects of targeting on the ability of smaller firms to innovate and compete, and on competition overall;
2. The effect of targeted ads on the kinds of products that consumers are offered—for example by allowing more specialized products to be marketed—their prices, and consumer purchasing decisions; and 
3. The role of advertising generally, and personalized advertising in particular, in creating “common knowledge” that endows products with intangible qualities that increase consumer welfare. 

We are also happy to consider other proposed topics or approaches addressing issues along these or similar lines.

Funding

ICLE would welcome short (less than one page) proposals to carry out a study into some or all of these areas, with particular preference for empirical work.

Funding levels and grant periods will be commensurate with the requirements of the research and the potential for the research to advance an understanding of critical issues. 

ICLE will work with the authors of accepted proposals to disseminate the research findings. 

Please email [email protected] for further information. We would appreciate indications of interest by Nov. 1, but are flexible about further deadlines.

About ICLE

The International Center for Law & Economics (ICLE) is a nonprofit, nonpartisan global research and policy center. ICLE works with more than fifty affiliated scholars and research centers around the world to promote the use of evidence-based methodologies in developing sensible, economically grounded policies that will promote consumer welfare and enable markets and innovation to flourish.

Business Leader – ICLE Director of Competition Policy Sam Bowman was cited by Business Leader in a story about his co-authored report finding that proposed U.K. rules limiting Big Tech firms’ ability to engage in mergers and acquisitions would the nation’s startup economy. The full story is available here.

The authors also fear it could leave the UK relatively worse off as a place to set up a tech business if other countries, especially the United States, don’t follow suit. Sam Bowman, the report’s co-author, said: “The UK government has misjudged the prospects for a similar crackdown on tech M&A in the United States, and as a result may back Britain into a corner. If we proceed with such stringent rules blocking these deals, but the US does not, the UK will become a terrible place to found a tech startup, since it will be so much harder to be acquired here than it would be in Silicon Valley. Even the European Union is not proposing such anti-tech rules. The UK startup scene is something to be proud of – it would be a profound mistake to make its life so much harder, and leave the UK as a global outlier.”

 

PORTLAND, Ore. (Sept. 27, 2021) — As Congress takes up bipartisan infrastructure legislation this week that would appropriate $65 billion for broadband infrastructure, as well as billions more in a $3.5 trillion reconciliation package, experts from the International Center for Law & Economics (ICLE) are available to discuss how best to address the nation’s broadband needs.

In a major ICLE white paper published in June, ICLE President Geoffrey Manne, Director of Innovation Policy Kristian Stout, and Associate Director of Legal Research Ben Sperry critiqued widespread claims that the broadband market is uncompetitive. The authors note that 95.6% of the population has access to at least 25/3 Mbps service and that, even where concentration can be observed in broadband markets, it has not been correlated with negative outcomes, such as decreased productivity or increased quality-adjusted prices.

Given Congress’ intent to spent tens of billions of dollars on broadband subsidies, the ICLE research counsels that such programs focus on the 4.4% of consumers who currently lack any access to broadband. Congress also could encourage greater broadband buildout by addressing costly local pole-attachment requirements and rules that a recipient of rural broadband subsidies must be deemed an Eligible Telecommunications Carrier (ETC) by a relevant state regulator.

In addition to the white paper, ICLE has published several short-form explainers in recent months that each address major issues relevant to broadband buildout:

• Build Broadband Better: Focus on Competition, Not Competitors
• The Problems with Municipal Broadband
• Encouraging Broadband Deployment: Removing Regulatory Barriers
• Internet Speed: What Do Consumers Actually Demand?
• Issue Brief: Pole Attachments and Broadband Buildout

Media interested in interviewing or booking Geoffrey Manne to discuss broadband competition may reach him at [email protected] or (503) 780-8515. Kristian Stout is available at [email protected] or (732) 690-0375.

Business Insider – ICLE Director of Competition Policy Sam Bowman was cited by Business Insider in a story about the role that unaffordable housing plays in a spate of persistent social problems. The full story is available here.

Shoring up home supply and allowing for denser construction could directly level the playing field, economists Sam Bowman and Ben Southwood wrote for the Works in Progress online magazine, with housing advocate John Myers.

“Increasing the supply of housing and commercial space, while ensuring that it benefits existing residents, could turn this zero-sum situation into one where everyone can be better off,” they added.