Posts Tagged ‘technology’

“What Does California’s New Data Privacy Law Mean? Nobody Agrees”

The new California law on consumer data is stringent but, as is so often the case with that state’s legislation, less than pellucidly clear [Natasha Singer, New York Times] :

“Companies have different interpretations, and depending on which lawyer they are using, they’re going to get different advice,” said Kabir Barday, the chief executive of OneTrust, a privacy management software service that has worked with more than 4,000 companies to prepare for the law. “I’ll call it a religious war.”

The new law has national implications because many companies, like Microsoft, say they will apply their changes to all users in the United States rather than give Californians special treatment.

Talking Warren’s big antitrust plans

“Presidential candidate Elizabeth Warren wants to break up big tech firms and impose new regulation on firms with high revenues. Walter Olson discusses what that might look like in practice.” I join Caleb Brown for a Cato podcast on themes outlined in this space last week. Related: Geoffrey Manne and Alec Stapp last March on Warren’s plans for tech and antitrust (“To Warren, our most dynamic and innovative companies constitute a problem that needs solving.”)

Bonus: earlier posts on Warren and her economic plans including white-collar prosecution, exit tax, regulation of private equity, and corporate governance first, second, third posts as well as political spending and labor co-determination.

An old story: social critics decry new technologies

In something of a convergence, anti-tech themes have become common both among the cultural critics of the social justice Left and the populist moralists of the Right. [Corbin Barthold, Truth on the Market]

As for the stuff the industry does make, [Republican Missouri Senator Josh] Hawley wants it changed. He has introduced a bill to ban infinite scrolling, music and video autoplay, and the use of “badges and other awards” (gamification) on social media. The bill also requires defaults that limit a user’s time on a platform to 30 minutes a day. A user could opt out of this restriction, but only for a month at a stretch.

The available evidence does not bear out the notion that highbrow magazines, let alone Josh Hawley, should redesign tech products and police how people use their time. You’d probably have to pay someone around $500 to stay off Facebook for a year. Getting her to forego using Amazon would cost even more. And Google is worth more still—perhaps thousands of dollars per user per year. These figures are of course quite rough, but that just proves the point: the consumer surplus created by the internet is inestimable.

It’s priggish, but enduringly popular, to see one’s fellow humans as being merely entrapped by the temptation to use new technology in frivolous or destructive ways, incapable of turning them to solid benefit. “When a lantern inventor obtained a patent to light London, observed Macaulay, ‘the cause of darkness was not left undefended.'”

California Consumer Privacy Act: legislate in haste…

The California Consumer Privacy Act, drawn up hastily to avert a threatened ballot initiative, purports to create six new categories of data-related consumer rights, “including the right to know; the right of data portability; the right to deletion; the right to opt-out of data sales; the right to not be discriminated against as a user; and a private right of action for data breaches.” Although sometimes compared to the European GDPR, the two laws are different and compliance with the one enactment (which has been immensely expensive already) does not accomplish compliance with the other. Expect uncertainty, fines, the California specialty of entrepreneurial class-action litigation, and more tilting of compliance cost structures to the benefit of tech companies and advertising intermediaries big enough to afford to spread the high expense over large revenue streams [Alec Stapp, Truth on the Market; more: Al Saikali, Washington Legal Foundation; Petrina McDaniel, Elliot Golding and Keshia Lipscomb, Squire Patton Boggs]

One year later, the harms of Europe’s data-privacy law

The European Union’s General Data Protection Regulation (GDPR), which went into effect just over a year ago, has resulted in a broad array of consequences that are expensive, unintended, or both. Alec Stapp reports at Truth on the Market, with more discussion at Marginal Revolution:

GDPR can be thought of as a privacy “bill of rights.” Many of these new rights have come with unintended consequences. If your account gets hacked, the hacker can use the right of access to get all of your data. The right to be forgotten is in conflict with the public’s right to know a bad actor’s history (and many of them are using the right to memory hole their misdeeds). The right to data portability creates another attack vector for hackers to exploit.

Meanwhile, Stapp writes, compliance costs for larger U.S.-based firms alone are headed toward an estimated $150 billion, “Microsoft had 1,600 engineers working on GDPR compliance,” and an estimated 500,000 European organizations have seen fit to register data officers, while the largest advertising intermediaries, such as Google, appear to have improved their relative competitive position compared with smaller outfits. Venture capital investment in Euro start-ups has sagged, some large firms in sectors like gaming and retailing have pulled out of the European market, and as of March more than 1,000 U.S.-based news sites were inaccessible to European readers.

More in Senate testimony from Pinboard founder Maciej Ceglowski via Tyler Cowen:

The plain language of the GDPR is so plainly at odds with the business model of surveillance advertising that contorting the real-time ad brokerages into something resembling compliance has required acrobatics that have left essentially everybody unhappy.

The leading ad networks in the European Union have chosen to respond to the GDPR by stitching together a sort of Frankenstein’s monster of consent,a mechanism whereby a user wishing to visit, say, a weather forecast is first prompted to agree to share data with a consortium of 119 entities, including the aptly named “A Million Ads” network. The user can scroll through this list of intermediaries one by one, or give or withhold consent en bloc, but either way she must wait a further two minutes for the consent collection process to terminate before she is allowed to find out whether or it is going to rain.

This majestically baroque consent mechanism also hinders Europeans from using the privacy preserving features built into their web browsers, or from turning off invasive tracking technologies like third-party cookies,since the mechanism depends on their being present.

For the average EU citizen, therefore, the immediate effect of the GDPR has been to add friction to their internet browsing experience along the lines of the infamous 2011 EU Privacy Directive (“EU cookie law”) that added consent dialogs to nearly every site on the internet.

On proposals to base legislation in the United States on similar ideas, see Roslyn Layton and Pranjal Drall, Libertarianism.org. [cross-posted from Cato at Liberty]

King of the Hill (tech antitrust division)

Mar 2000: Palm Pilot IPO’s at $53 billion

Sep 2006: “Everyone’s always asking me when Apple will come out with a cellphone. My answer is, ‘Probably never.’” – David Pogue (NYT)…

Jun 2007: iPhone released

Nov 2007: “Nokia: One Billion Customers—Can Anyone Catch the Cell Phone King?” (Forbes)

A brief history of impregnable tech monopolies that were pregnable after all, from personal computers to music distribution to social media, by Geoffrey Manne and Alec Stapp [Truth on the Market][adapted and condensed from Cato at Liberty]

April 3 roundup

  • “Arkansas Passes Bill to Prevent Sale of ‘Cauliflower Rice'” [Bettina Makalintal, Vice via Anthony M. Kreis (“Carolene Products of our time”, and more on that celebrated filled-milk case]
  • Ted Frank has another case raising the cy pres issues the Supreme Court just sidestepped in Frank v. Gaos [Marcia Coyle on rewards-program class action settlement in Perryman v. Romero]
  • Feds recommend 12 year sentence for copyright and ADA troll Paul Hansmeier [Tim Cushing, TechDirt]
  • Didn’t realize New York City still had such a substantial fur industry – much of it in the district of an elected official who’s keen to ban it [Carl Campanile, New York Post]
  • “Who’s Afraid of Big Tech?” Cato conference with Matthew Feeney, Alec Stapp, Jonathan Rauch, Julian Sanchez, Peter Van Doren, and John Samples, among many others [panels one (“Big Brother in Big Tech”), two (“Is Big Tech Too Big?”), three (“Free Speech in an Age of Social Media”)]
  • Looking forward to this one, due out from New York lawyer James Zirin in September: Plaintiff in Chief: A Portrait of Donald Trump in 3,500 Lawsuits [St. Martin’s Press]

Does European data privacy regulation help entrench U.S. tech firms?

Roslyn Layton, AEI, in November:

The EU’s General Data Protection Regulation (GDPR), along with similarly heavy-handed regimes such as California’s Consumer Privacy Act, entrenches established platforms that have the resources to meet their onerous compliance requirements. Since the GDPR’s implementation in May, the rank and market share of small- and medium-sized ad tech companies has declined by 18 to 32 percent in the EU, while these measures have increased for Google, Facebook, and Amazon.

Via Alex Stamos thread on Twitter (“Anybody wonder why the big tech companies didn’t really fight that hard against GDPR? It isn’t due to a newfound love of regulation”) by way of James Pethokoukis; more, Antonio García Martínez.

Liability roundup