Does Piracy Cost Content Creators a Fistful of Dollars?

A month ago, I examined the academic literature surrounding what turns out to be a very tricky question for empirical researchers to answer—does digital theft of music and film have a measurable negative impact on profits for content creators? Methodologies addressing the question are fraught with complications, and while the majority of papers surveyed in a recent review of the literature (Hardy et al.) find that online piracy is not, in fact, a victimless crime, some past studies remain inconclusive. The literature is sometimes inconclusive because it is very difficult to prove that content being stolen has a negative impact on revenue in an era in which almost all digital content is stolen to some degree. However, research of late has been clearer in identifying significant causal impacts of piracy on profits and content creation in the music and film industries. As academics hone in on the question, results are beginning to coalesce around exactly the answer you would expect—online piracy has a negative impact on revenue and content creation in both music and film.

(First, I should note that as literature reviews go, Hardy et al. actually

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Assessing the Costs of a More “Closed” Internet

I had the pleasure of moderating a panel at a very interesting and informative OECD workshop this week in Washington, DC, on how to better measure the benefits of the open Internet and the costs of restricting access to it. This is a critical question, because a growing number of governments around the world are blocking Internet flows or prohibiting access to certain content. There needs to be a stronger case for how, why, and to what extent these policies stunt economic growth and inhibit social progress. Yet marshaling such an argument requires not only better data and analysis but also the right conceptual framework.

People often use the terms “open” and “closed” Internet without defining them. Here, fully “open” means everyone is free to share and access any information they wish, and more “closed” means governments or other third parties are blocking or prohibiting vast troves of information. A draft background document that the OECD distributed to panel participants was helpful in that it rightly acknowledged that the Internet is not fully “open,” nor should it be. As ITIF has argued, the Internet is not fully open anywhere,

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The Architect of Europe’s Digital Single Market Leaves Important Questions Unanswered on U.S. Visit

At a time of considerable uncertainty about the future of transatlantic digital commerce, one Europe’s top officials for such issues, Gϋnther Oettinger, visited the United States last week and did little to dispel concerns that the EU’s Digital Single Market (DSM) may raise new barriers for U.S. companies. Of particular concern for many in the United States is vague language in the DSM that appears to be designed for protectionist purposes. As one of the strategy’s chief architects, Oettinger would have been uniquely well-positioned to offer needed clarification. He didn’t.

The growing list of political, legal, and regulatory cases involving top American technology companies prompted U.S. President Barack Obama earlier this year to call out Europe for protecting domestic competitors. More generally, it has raised serious concerns about the direction that Europe’s regulatory environment is heading as it proceeds through multiple policy initiatives in parallel—the Digital Single Market, the General Data Protection Review, a revision of the U.S.-Europe Safe Harbor Framework, and the Trans-Atlantic Trade and Investment Partnership. Any one of these on its own would be a major issue for the transatlantic trade relationship, but taken together, they

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The Sharing Economy Will Benefit All, But Only If We Let It

The House Energy and Commerce Committee is holding a hearing this week on “How the Sharing Economy Creates Jobs, Benefits Consumers and Raises Policy Questions.” These new Internet marketplace platforms are raising many new policy questions about U.S. labor law and competition.

A large part of the problem is that U.S. labor law remains guided by the National Labor Relations Act of 1935. A lot has changed since then. In 1935 the United States faced little international competition. The economy was dominated by large, stable companies that hired a lot of people. Many workers anticipated staying with their current employer for decades. Coincidentally, these traits also favor unionization.

Today’s global economy is characterized by international competition that we are losing in some respects. Companies are slashing fixed costs to avoid the very real threat of bankruptcy or acquisition. They can no longer make long-term commitments to their workers, who, in any case, anticipate working for many companies during their career. Labor law has strained to accommodate this.

Into this mix comes the rise of the Internet platforms that make up the sharing economy. Platforms such as Uber and

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Top 9 False Promises That China Made in Joining the World Trade Organization

After almost 15 years in the World Trade Organization (WTO), China has still failed to follow through on many of the trade-liberalizing commitments it made in order to convince free trade-oriented nations to approve its membership in 2001. These broken promises have harmed the global trading system as   well as both economic growth and the health of innovative industries across the United States and Europe. Here are nine commitments China made, but never lived up to:

  1. Refraining from requiring technology transfer as a condition of market access

Although its WTO accession agreement included rules forbidding China from tying foreign direct investment or market access to technology-transfer requirements, it remains commonplace for China to compel firms to hand over their technology in exchange for the privilege of investing, operating, or selling in China.

  1. Significantly reducing intellectual property (IP) theft and violations

Joining the WTO required China to recognize the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which provides protections for patents, copyrights, trademarks, service marks, industrial designs, digital content, and other intangible property. Unfortunately, Chinese IP theft grows unabated. The IP Commission Report on the Theft of U.S. Intellectual

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