FGV-CTS 23 October 2015 "This talk is about competition law and regulation but it takes the (very) long pre-historic view…" @ChrisTMarsden

1. PLATFORM
NEUTRALITY?
THE LONG VIEW
Professor Chris Marsden @ChrisTMarsden
FGV-CTS 23 October 2015

2. •But it takes
the (very) long
pre-historic
view…
THIS TALK IS
ABOUT
COMPETITION
LAW AND
REGULATION

3. INTERNET
C. 1968
WEB BROWSERS
1993
MASS MARKET
1998
BROADBAND
C.2005
“WEB2.0”

5. U.S.A. LONG VIEW

6. Access Issues under EU Regulation &
Anti-trust Law —Telecoms &
Internet Markets
• July 2000 Research Paper
• Weatherhead Center for
International Affairs, Harvard
University
HERBERT
UNGERER:
KEY EC
POLICY
MAKER
1983-2010

7. • who count on low costs of entry and a
robust competitive environment,
• many segments of the new Internet-
based economy could develop,
• driven by the requirement [of] world-
wide presence to reach scale economies
• Towards structures controlled by
• highly dominant enterprises.
QUITE
CONTRARY TO
BELIEFS OF
INTERNET
LIBERTARIANS

8. Potential anti-competitive behaviour —
• becomes more difficult to regulate & check
in the different geographical markets and
jurisdictions,
• the behaviour itself can only be judged on a
global level.
GLOBAL MARKETS FOR
E-COMMERCE

9. • At a more profound level,
• it also implies [review] of
• adequacy of institutional arrangements
• for dealing with these issues.
NEW CHALLENGE FOR COOPERATION
BETWEEN REGULATORS AND ANTITRUST
AUTHORITIES AT A GLOBAL LEVEL

10. • Essential layers of this new infrastructure
are either
• still under bottleneck control
–E.g. local telecommunications access
• threaten to fall under such control,
–E.g. access to "top-level Internet
connectivity"
THE NEW COMMUNICATIONS
INFRASTRUCTURE IS A LAYERED SYSTEM

11. REGULATING PRIVACY
• (2013) Regulating Code, MIT Press
• Brown (2012) Privacy attitudes,
incentives and behaviours
– https://www.slideshare.net/blogzill
a/privacy-attitudes-incentives-and-
behaviours

12. MY FIRST
ACADEMIC
BRAZIL TRIP:
NATAL 2014

13. • Evolution, Psychology , Economics
• formed to promote the exchange of
ideas and research findings using
evolutionary theory,
• Including studies of animal behavior,
• to better understand human nature.
HUMAN
BEHAVIOR
AND
EVOLUTION
OF SOCIETY
25TH ANNUAL
CONFERENCE

14. ONLINE BEHAVIOUR MATTERS
• To NSA
• To advertisers
• To employers
• To friends
• To your future

16. ISABEL
AND THE
BONOBOS

17. BONOBOS
ARE ONE OF
4 HIGHER
ORDER
APES:
OUR
RELATIVES

18. BONOBOS LIVE IN THE
EASTERN FORESTS OF
CONGO.
AMERICANS LIKE
THEM AS ‘BABY’ PETS
SO HUNTERS
KILL MOTHERS
TO KIDNAP ORPHANS

19. BONOBOS
ARE AN
EQUALITY
LOVING
PEACEFUL
SOCIETY
WITH
SEXUAL
LIBERATION
AND
EQUALITY

20. CHIMPS
ARE MORE
LIKE
ANGLO-
SAXONS

21. GATHERING IN AGGRESSIVE
MALE GANGS: BRUSSELS

22. PRIMATES HAVE SEVERAL
IDEAL FAMILY GROUP TYPES

23. WE ALL HAVE A LIMIT TO
OUR REAL FRIENDS

24. FACEBOOK & SOCIAL
NETWORKS CHANGE THIS?

25. A REMINDER
FOR ALL
SCIENTISTS

26. FASHION
CHANGES BUT
HUMANS HAVE
THE SAME
BASIC NEED
TO VIEW NEWS
AND TO
ASSOCIATE
WITH
‘FRIENDS’

27. FACEBOOK TOOK GLOBAL
SOCIAL IMPULSE FOR ‘FRIENDS’

29. HOW CAN FACEBOOK
MAINTAIN DOMINANCE?
• Avoid AOL, News Corp, Microsoft, Yahoo! decline
• Tricky task –buying emerging market leaders
– ‘Curse of AOL’ – eWorld, Netscape, Bebo
– Yahoo! – GeoCities, Flickr
– News Corp – MySpace
– Microsoft – Hotmail, cable firms
• FBK – Instagram, WhatsApp, 3rd party games
– Teen reaction: “I used those apps because they
weren’t Stalkbook!” They move to SnapChat

30. FBK AGREED TO BUY WHATSAPP
2014: $19,000,000,000
• Why? WhatsApp is ‘free’ ($1)
–500m users
–50bilion daily messages
–Facebook IM client specific to mobile
1. So why are FBK buying WhatsApp?
2. Is there a market for free messages?
3. Is Facebook a monopoly?
• Answers: No, No, No – say “experts”
–Who owns the experts?

31. VALUATION WAS RIGHT

32. $$$$$$TRILLION
–Facebook
–Google
–Twitter
–Baidu
–Vkontakte
–Skype

33. BUT WE BONOBOS HAVE
RELATIVELY FEW
SOURCES WE USE

34. MEDIA TENDS TO OLIGOPOLY –
ALWAYS HAS, ALWAYS WILL

35. THAT’S WHY WE HAVE
ALWAYS REGULATED MEDIA
IN THE PUBLIC INTEREST

36. WHOSE PRIVACY RULES?
• US companies
• Facebook/WhatsApp/Instagram
• Google/YouTube/Blogger
• Microsoft/Bing/Skype
• Yahoo/Flickr
• US privacy policy – no generic law
– Unlike European Directive(s)
• European regulation
– Dublin, Ireland– sales tax, regulation, corp. tax
– Luxembourg – eBay + Skype
• World’s least competent privacy regulators?
– Portarlington 30 people, Lux 13

37. US RULES HAVE TEETH – FTC
WARNING TO FACEBOOK IN
MERGER WITH WHATSAPP

38. WE ARE SILK WORMS

39. WE ARE NOT OIL!
Personal data is NOT metaphor: oil in digital economy
– unless bodies have seeped into the sediment.
Personal data accumulate with treks into cyberspace
• Better metaphor is silk,
– woven into tapestry of online personality.
• Potential to pupate from caterpillar-like role as a
producer of raw silk
• Ability to regenerate into a butterfly or moth?

41. SILKWORMS THAT
TURNED
• Billions weaving of prosumer-created sites
• Silk created tapestries:
–Wikipedia, FBK and MySpace
–Arguably loss of ownership led MySpace
decline
• Prosumer boycott led by those preferring
control of own data
–cocooned in own personal form: chrysalis
or pupae

42. CONCLUDING THOUGHTS:
MORE PRIVACY REGULATION
• Widespread regulation of social networking
– Including in US Federal Trade Commission
• European Court cases: data retention & deletion
• European pressure on PRISM post-Snowden
• National regulators on cloud, Streetview and
others
• European/US pressure on merger cases?
• Safe Harbour ruled inadequate Sept. 2015
• Marca Civil do Internet?

43. ANYONE WHO
SAYS THEY’RE
BREAKING THE
INTERNET IS A
HORSE’S
BEHIND

44. SURVEILLANCE
EXISTENTIAL THREAT TO
SOCIAL NETWORKS?
• Not so much…ironically required by https
encryption default
–NSA can brute force TLS since 2010
–So much (most?) https insecure
• Who do they target? Encryption users esp. TOR
• ‘If you have nothing to hide, nothing to fear’
• ‘Metadata isn’t real data’
• Be quiet, peasants!