Salil K. Mehra

Secondary Liability of Internet Service Providers in the United States: General Principles and Fragmentation

Private Internet service providers (ISPs) have played a key role in propelling the industry that the United States relies so heavily upon. The law that governs the secondary liability of ISPs significantly affects their operations; nevertheless, the U.S. law of secondary liability of ISPs is surprisingly fragmented and potentially outdated. Although the law builds on general tort law principles, it creates variations in different areas of law, such as copyright law, trademark law, and defamation law. The chapter reviews the U.S. rules of secondary liability relevant to ISPs, explores the safe harbours and immunities available under U.S. law, and discusses the best practices developed by the private sector in response to the existing rules. The Conclusions suggest the technological developments that might affect potential changes to the rules in the near future.

Competition Law for a Post-Scarcity World

Writers, economists and IP scholars have hailed signs of an incipient shift to a post-scarcity world. Driving this change are rapid decreases not only in marginal cost, but also in the fixed or first-unit costs of production. Whether these changes become economy-wide, or remain confined to a subset of industries, they have dramatic implications for competition law and policy. This Article is the first to address these implications. In particular, because of the incentive for incumbent firms to engage in what may be termed “anti-disruption” – as examples such as the Apple/e-books antitrust case and the regulatory responses to Uber show – competition law must play an active role in assisting the transition to a post-scarcity world. Playing this role will not be simple, but the welfare gains of this societal shift make it impossible to ignore.

De-Humanizing Antitrust: The Rise of the Machines and the Regulation of Competition

Increasingly, firms are knitting together newly available mass data collection, Internet-driven interconnective power, and automated algorithmic selling with their traditional supply-chain and sales functions. Traditional sales functions such as competitive intelligence gathering and pricing are being delegated to software “robo-sellers.” This Article offers the first descriptive and normative study of the implications of this shift away from humans to machines (the “robo-sellers”) for antitrust law. This change is a critical challenge for antitrust law – both in how it is currently applied and in highlighting and exacerbating its existing weaknesses. First – and critically – robo-sellers will increase the risk that oligopolists will coordinate prices above the competitive level, thereby harming consumers. The Sherman Act contains a well-known gap in its coverage under which oligopolists that achieve price coordination interdependently, without communication or facilitating practices, generally escape antitrust enforcement, even when their actions yield supracompetitive pricing that harms consumers. Because robo-sellers possess traits that will make them better than humans at achieving supracompetitive pricing without communication, all things being equal, they will increase consumer harm due to this gap.A second problem concerns blackletter antitrust law in dealing with price coordination through communication or facilitating practices; current doctrine requires that there be an anticompetitive “agreement” for there to be a violation of the Sherman Act for price fixing. Under standard models, even where oligopolists have independent incentives to price supracompetitively, they can often do better via an agreement; moreover, in other cases, competing firms can only achieve supracompetitive pricing by explicit collusion. In these cases, usually analyzed as a prisoner’s dilemma in which the Nash equilibrium is to “cheat” on the cartel, an agreement is required to avoid the inferior (from the price-fixers’ perspective) outcome. In order to find such an “agreement,” courts, government enforcers, and practitioners tend to focus on finding “intent,” efforts to sowing fear and distrust, and discovering a “meeting of the minds.” These standard inquiries derive from a more than a century-old embedded assumption that antitrust regulates sales by human actors; they will be a poor fit in addressing robo-sellers, which will function differently and which will likely not create the same kinds of evidence that these inquiries rely on.What can be done about the anticompetitive effects of robo-selling? This Article assesses several possible solutions, but find that they will be quite difficult to reconcile with current antitrust law. It conclude that, at least as a feasible second-best result, incorporating an evolving approach to robo-sellers may be a worthwhile expansion of the FTC’s ongoing regulatory program that has already begun target the competition and consumer protection aspects of consumer data collection by sellers. For example, the FTC has already begun to consider the effects of mass data collection and algorithmic processing on consumers from the perspective of disclosure and discrimination (both price and social); efficiencies should exist in broadening the inquiry to include effects on price coordination and cartel behavior.

Japan’s copyright law revisions, disruptive innovation and user-generated content

In 2010, several revisions to Japan’s Copyright Law became effective. In particular, knowingly downloading infringing copies of several varieties of copyrighted files was removed from an existing safe harbor for private copying. (Uploading infringing material had already been carved out.) Although specific penalties for the newly prohibited conduct were not set forth in the revisions, the change effectively sets down a marker concerning permissible conduct, and the government and copyright industry have widely publicized the effects of this change. Recent cases involving indirect liability for the creation of software used by others engaged in filesharing or unauthorized access shows that disruption may be met with prosecution.