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

1. Attacking the money supply to fight
against online illegal content ?
Cédric Manara, EDHEC Business School
CEPS Task Force on Copyright in the Digital Single Market, Brussels,
Jan. 16, 2013

2.  [source : Google Maps]
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3.  [source : UnderNews.fr, Nov. 5, 2012]
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4. How to fight against
"bad guys"?
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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 ?
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6. 1. Does the "follow the money"
approach work ?
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7.  [source : McAfee Report, 2007]
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8. 2007 : first (aborted) attempt
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9. Meanwhile, in the
United States…
 Prohibition of online betting games
• Self-voluntary first
• Then by law
• Nota: regulated sector / limited effects / WTO
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10. ‘Best practices to address copyright
infringement and the sale of counterfeit goods
on the internet’
 Filiation?
 Rarely used…
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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
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12. Wikileaks [2]
• [Source: TechDirt, July 12, 2012]
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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
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14. 2. Illicit content & business
models
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15. Direct revenues
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16. Indirects revenues
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17. Advertising:
multiplicity of intermediaries
The example of domain name parking
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18. Payments "ecosystem"
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19. Spam "VIAGRA® Official Site"
K. Levchenko et al. (2010), Click Trajectories: End-to-End Analysis of the Spam Value Chain
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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
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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?
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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]
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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)
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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?
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25. 25

26. Limits
 Hybrid economy
 Encourages more private policing
 Geographical scope
• Rights exhaustion
─ Discussable Visa provision: « a transaction must be
legal in both the Cardholder's jurisdiction and the
Merchant’s jurisdiction »
 Efficiency?
• Possible reaction of targets: multiple
accounts, straw men, etc.
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27. Interest of the Commission?
 [source : J. Bergevin, September 17, 2012]
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