Attacking the money supply to fight against online illegal content ?

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Talk given before the CEPS Task Force on Copyright in the Digital Single Market, Wednesday, 16 January 2013, Brussels

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Attacking the money supply to fight against online illegal content ?

  1. 1. Attacking the money supply to fightagainst online illegal content ?Cédric Manara, EDHEC Business SchoolCEPS Task Force on Copyright in the Digital Single Market, Brussels,Jan. 16, 2013
  2. 2.  [source : Google Maps] 2
  3. 3.  [source : UnderNews.fr, Nov. 5, 2012] 3
  4. 4. How to fight against "bad guys"? 4
  5. 5. In an acentric internet, regulation efforts tend to target bottlenecks: • Content removal  June 8, 2000 directive • Filtering  CJEU SABAM rulings • Search results demoting  Allostreaming, Google • Access points  Domain names seizures  What about money flows ? 5
  6. 6. 1. Does the "follow the money" approach work ? 6
  7. 7.  [source : McAfee Report, 2007] 7
  8. 8. 2007 : first (aborted) attempt 8
  9. 9. Meanwhile, in the United States… Prohibition of online betting games • Self-voluntary first • Then by law • Nota: regulated sector / limited effects / WTO 9
  10. 10. ‘Best practices to address copyrightinfringement and the sale of counterfeit goods on the internet’ Filiation? Rarely used… 10
  11. 11. Wikileaks [1] “Since 7th December 2010 an arbitrary and unlawful financial blockade has been imposed by Bank of America, VISA, MasterCard, PayPal and Western Union. The attack has destroyed 95% of our revenue” - http://wikileaks.org/Banking-Blockade.html 11
  12. 12. Wikileaks [2]• [Source: TechDirt, July 12, 2012] 12
  13. 13. First lessons Mechanisms do exist; they are limited • to a sector • geographically US legal framework • grants more power to the person who drafts • encourages self-regulation • creates legal uncertainty outside the borders ─ examples of sanctions against a website which unlawfulness remains to be established 13
  14. 14. 2. Illicit content & business models 14
  15. 15. Direct revenues 15
  16. 16. Indirects revenues 16
  17. 17. Advertising:multiplicity of intermediaries The example of domain name parking 17
  18. 18. Payments "ecosystem" 18
  19. 19. Spam "VIAGRA® Official Site"K. Levchenko et al. (2010), Click Trajectories: End-to-End Analysis of the Spam Value Chain 19
  20. 20. A collection of contracts Debtor  Creditor • Debtor  Bank • Creditor  Bank Bank  Bank • Bank  Electronic money issuer • Bank  Payment service provider • Payment provider  Technical operator Contractual restrictions are possible 20
  21. 21. 3. (Modest !) recommendations Payment intermediaries Advertising intermediaries Limited number of actors Wide range of actors (at the center) (but Google a major one) Easy identification, Uneasy inventory prudential regulation  e-commerce directive e-commerce directive   Statu quo? Code of conduct Collaboration? (article 16 + preambles 32 et 49) Legislative intervention? 21
  22. 22. Towards a code of conduct in advertising? YearAdvertiser Accounts Suspended for Terms of Service and Advertising PoliciesSites Rejected for Site PolicyAds Disapproved2011824K610K134M2010248K398K56.7M200968.5K305K42.5M2008 18.1K167K25.3M  [May 25, 2012] 22
  23. 23. • Notice to the payment intermediary (subsidiarity)• The payment intermediary informs its client• Evaluation of the notice by the intermediary?• Escrow of funds deriving from illegal activities• Account termination (if the intermediary finds it appropriate or justified) 23
  24. 24. Options Statu quo • Wouldn’t this short term fight contradict with long term identification of bad guys? ─IPS Study Collaboration • From de facto practices towards self- regulation? Legislative evolution • IPRED? 24
  25. 25. 25
  26. 26. Limits Hybrid economy Encourages more private policing Geographical scope • Rights exhaustion ─ Discussable Visa provision: « a transaction must be legal in both the Cardholders jurisdiction and the Merchant’s jurisdiction » Efficiency? • Possible reaction of targets: multiple accounts, straw men, etc. 26
  27. 27. Interest of the Commission?  [source : J. Bergevin, September 17, 2012] 27

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