Information Flow

Foundem Has Lost It

by Glenn Manishin on May 23, 2013

In the ongoing saga of governmental antitrust investigations of Google, recent weeks have witnessed a new level of rhetoric and disingenuous use of the regulatory process to handicap, rather than promote, competition and innovation. The current case in point relates once again to search neutrality, but this time complaining rivals remarkably object to getting exactly what they’ve asked for over many years.

Just a little less than four months after the U.S. Federal Trade Commission (FTC) closed its monopolization investigation into alleged “search bias” by Google, the European Commission (EC) — the pan-European competition authority for the 30-nation European Economic Area (EEA) — released a set of proposed commitments by Google designed to resolve the competition “concerns” preliminarily outlined by EC competition chief Joaquin Almunia. That set off a firestorm of criticism from so-called “vertical” competitors (e.g., travel booking or consumer shopping sites), led by UK firm Foundem, a plaintiff against Google in its own antitrust lawsuit in England.

The first and most basic competition concern asserted by the EC was that Google gives preference to its own services, like travel search, by placing those “specialised” (in European spelling) search results above “organic” or “natural” search results. Google proposes to label these specialized results as paid placements and to add equally prominent links to vertical rivals alongside. Under the commitments Google would auction links for commercial services to qualifying rivals using a lengthy set of rules for transparent and equal treatment. It is precisely the paid link insertion remedy that Google critic and long-time legal adversary Gary Reback called for at an April 2013 FairSearch.org event in Washington, DC.

Foundem opposes that solution. But making heads or tails of Foundem’s rather incoherent response to Google’s EC settlement proposal is difficult. In part that’s because the response is a hodge-podge of discredited claims, incorrect assumptions and fuzzy reasoning. In part it’s because Foundem’s use of over-the-top language and Chicken Little predictions makes it impossible to decipher facts and reality from mere opinions and sour grapes. For instance:

If the Commission were to adopt Google’s proposals in anything like their present form, it would be unwittingly playing into Google’s hands — aiding and abetting Google in its long running strategy to transition commercial searches away from its natural search results and into its paid advertisements. Under these proposals, Google would not only continue to profit from the traffic it hijacks from rivals, but it would now also profit from the traffic it sends to rivals…. Any vertical search companies that survive the transition to such a radically altered and unfavourable marketplace would be left eking out a living on the slimmest of margins from the scraps left over from the traffic, and now revenues, that Google would be diverting to its own services.

If one separates the adjectives from Foundem’s substantive criticisms, there are four principal contentions it makes.

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European Commission Planning GIPO, a Global Participatory Internet Policy Database

by Ali Sternburg on May 14, 2013

The European Commission announced plans yesterday with several other nations and NGOs to launch a platform called the Global Internet Policy Observatory (GIPO), development of which is likely to start in 2014, for increasing participation and engagement around Internet policy debates and decision making.  This initiative is encouraging “participation of all stakeholders across the world,” and intends to supplement existing fora, providing additional information and expertise.

GIPO plans to follow developments in policy, regulations, and technology, by:

  • “automatically monitor[ing] Internet-related policy developments at the global level, making full use of ‘big data’ technologies

  • identify[ing] links between different fora and discussions, with the objective to overcome ‘policy silos’

  • help[ing] contextualise information, for example by collecting existing academic information on a specific topic, highlighting the historical and current position of the main actors on a particular issue, identifying the interests of different actors in various policy fields

  • identify[ing] policy trends, via quantitative and qualitative methods such as semantic and sentiment analysis

  • provid[ing] easy-to-use briefings and reports by incorporating modern visualisation techniques”

The EC announcement demonstrates a commitment to Internet freedom, citing a February speech from Neelie Kroes, the Vice-President of the European Commission responsible for the Digital Agenda, entitled “Stopping a Digital Cold War.”  (The Obama Administration has similarly spoken out in support of Internet freedom, such as its statement during the controversial WCIT negotiations.)  As DisCo has previously covered, the proposals being put forth at WCIT would have threatened the Internet’s disruptive potential, and we remain committed to fighting to keep the Internet open.  In contrast with the closed WCIT talks, the Commission emphasizes the intent to involve all stakeholders in GIPO, including the developing world and “groups which may have so far been marginalised in Internet debates and decisions.”

The headline of the announcement refers to the current state of affairs as a “global Internet policy labyrinth,” a word which conjures a complicated and confusing maze.  GIPO’s crowd-sourced knowledge base intends to provide some much-needed guidance for navigating Internet policy.

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Obama Administration Signs an Executive Order Making More Raw Data Available to Entrepreneurs

by Daniel O'Connor on May 13, 2013

Last Thursday, the President Obama signed an Executive Order requiring that “the default state of new and modernized Government information resources shall be open and machine readable.”  In a memo elaborating on the President’s order, the Office of Management and Budget (OMB) advised federal agencies and executive departments:

Specifically, this Memorandum requires agencies to collect or create information in a way that supports downstream information processing and dissemination activities. This includes using machine­ readable and open formats, data standards, and common core and extensible metadata for all new information creation and collection efforts. It also includes agencies ensuring information stewardship through the use of open licenses and review of information for privacy, confidentiality, security, or other restrictions to release. Additionally, it involves agencies building or modernizing information systems in a way that maximizes interoperability and information accessibility, maintains internal and external data asset inventories, enhances information safeguards, and clarifies information management responsibilities.

This step by the Obama Administration goes beyond the Open Government Directive of the President’s first term, that focused on the release specific datasets.  Now, CIOs of government agencies must consider public accessibility and use of government data from square one.  This sets a new default position of U.S. government data: open, machine readable and accessible to to public (with a key exception: “wherever possible and legally permissible”).

Collecting and storing a wealth of government data in both human and machine readable formats, with attention paid to ease of use and interoperability with common software tools has the potential to change how the federal government operates and promises to make available a wave of new, useful data for our nation’s entrepreneurs and programmers to manipulate and make more useful.  As U.S. Chief Technology Officer Todd Park and Chief Information Officer Steven VanRoekel point out in a video accompanying the President’s announcement, releasing government information in the past — such as GPS and weather data — has sparked waves of private sector innovation that made government data more useful to everyday citizens.

Also of note, as part of this initiative, the White House has released a new suite of open source software tools (on Github) that federal agencies (or private citizens) can employ to better organize and use the raw data.

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Defamation, Autocomplete And Search Royalties: How Not To Govern the Internet

by Glenn Manishin on May 6, 2013

With the controversy surrounding the International Telecommunications Union (a UN treaty organization) just recently subsiding, it is time to take a look at Internet governance from a different perspective. We all know that laws and legal principles differ among countries. What many do not realize is that these laws — most completely non-tech oriented — are having a massive and negative impact on Internet innovation.

In America we proudly have the First Amendment, the fair use doctrine and the DMCA. The first limits the reach of liability for libel (defamation) at least to cases, for non-celebrities, where a publisher is at fault (i.e., negligent). Section 230 of the last allows ISPs, websites and Internet hosts a legal safe harbor from copyright and other legal offenses resulting from user-generated content or any other content that a customer, client or some third-party has published. These landmark legal regimes are hallowed in the U.S., for instance used to strike down overreaching Web censorship efforts by federal government. Fair use, in turn, permits non-commercial or transformative use of a portion of copyrighted content. Think Google image search thumbnails or blockquotes from a news source in someone’s blog or a movie clip in a televised review.

Things are very different elsewhere. Three cases in point.

  1. In Germany and perhaps soon other EU nations, search engines that display snippets of indexed Web pages in response to user queries are now by statute responsible for paying copyright royalties to the original publisher, regardless of whether the content owner charges for its stories with a paywall. 
  2. In France, Italy, Ireland,  Australia and now Japan, courts permit individuals to recover for libel based on autocomplete and search results that return incorrect or harmful personal information, but against the search provider, not the writer or content publisher.
  3. A Denmark court ruled deep linking illegal, as did Germany, leading some to believe that linking to a website other than the front page was illegal throughout Europe. While the German courts overturned that decision, it was Agence France Presse (AFP) which eventually sued Google News for brazenly daring to send search  traffic to the organization’s news articles.

These results are foreign, literally, to U.S. jurisprudence. But they also illustrate a vitally important point. Legal regimes that have nothing to do with the Web are being applied in ways which upset existing services users take for granted and that threaten to impede future innovation.  Linking is inherent in HTML and represents the essence of the Web. No one in America would argue seriously today that a hypertext URL link represents copyright violation. Search “autocomplete,” in turn, is not a creative activity, but a very useful technical advancement; it applies computer algorithms based on past searches to predict what the current user wants to see, speeding the retreival of information from the Web.

Permitting autocomplete defamation suits against Google or Bing because other Web users have searched for information that damages an individual’s reputation is alien to our American way of thinking. It’s censoring completely accurate factual information about stuff on the Web, although that stuff may itself be factually wrong.  The augmentation of liability is also just plain silly, because both autocomplete queries and search results themselves merely return an indexed link to something someone else has posted on the Web.

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Observations on Reddit’s Apology

by Matt Schruers on April 24, 2013

On Monday, the website Reddit apologized for the actions of certain Reddit users, a large number of whom had speculated extensively about the identity of the Boston Marathon bombers on a user-created discussion thread on that site.  Although this apology was applauded in some circles, it was a mistake — a mistake which may create unrealistic and undesirable expectations about the future of online communications.

By way of background, the days after the attacks saw Reddit and Twitter users engaged in amateur, crowd-sourced investigations, sharing photographs, notes, and speculation on numerous individuals photographed with bags who might be suspects.  Suspicion fell upon on a local athlete.  These speculative claims were subsequently repeated by the NY Post, which went so far as to falsely label two individuals “Bag Men,” republishing their photographs as front page news, an act which media watchers called “appalling.”  Yet these claims were thereafter repeated by other traditional media outlets, until the allegations were ultimately refuted.  Separately, Twitter speculation and Reddit comments were repeated by journalists, incorrectly naming a missing Brown University student as a suspect.

However inappropriate and unwise Reddit and Twitter users’ comments may have been, neither Reddit nor any other service should create the expectation that a service should have policed the speech of its users. MORE »

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Can the Internet Change the Economics and Politics of International Trade?

by Daniel O'Connor on February 12, 2013

International trade has traditionally been the bastion of large multinational companies (MNCs) secretly negotiating esoteric treaties in far-off international locations.  The optics of this — coupled with classic public choice theory — are largely what explains the domestic political pushback against these agreements.

So, why is trade viewed as the exclusive playground of large MNCs?  Well, for a time, it was:  the huge operational and logistical costs of operating in global markets meant that those corporations that benefited from free trade the most were large MNCs who could leverage their significant resources to build global supply chains and create massive economies of scale.  The losers of trade, on the other hand, tended to be smaller domestic industry and labor that faced downward pricing pressure from being exposed to more efficient global competition.  Although society at large benefitted, those harmed by free trade would organize into a powerful political free trade blocking force.  As two prominent trade scholars point out:

“Small and medium sized enterprises (SMEs) and NGOs of various kinds generally play much less a role in national trade debates.  This started to change in the 1990s. One reason for the increased activism was a perception that ‘big business’ dominated the process, reducing the perceived legitimacy of the trading system” (Hoekman & Koestecki 638).

So even though the concept of “freer trade is good” (in aggregate at least) is one of the few things that economists agree on en masse, actual free trade agreements proved extraordinarily difficult to negotiate in practice because the losers were able to mount effective domestic resistance campaigns.  Their resistance was aided by the fact that domestic industries that were harmed were generally more sympathetic than the large MNCs that would benefit at their expense.

However, there is hope that the politics of trade will smooth out as the Internet has made international commerce more equitable.  Although big MNCs were the first major commercial beneficiaries of globalization (besides consumers who benefit from lower prices, more choice and better quality), the increased spread of the Internet has expanded the number of exporters that benefit from international commerce.

Back in November, economist Marcelo Olarreaga wrote a post on the World Bank’s blog about a study that he and his colleagues released illustrating that eBay reduces the effect of distance on trade by 65% compared to the physical world.  This is incredibly significant for small- and medium-sized businesses, as they were precisely the ones who have the most difficult time overcoming the “friction” created by distance in international trade.  (For the study, Olarreaga and his team were granted access to a proprietary database of statistics relating to eBay transactions across 62 countries and 40 product categories over a 3 year period from 2004-2007.)

The study provided empirical substantiation to a thesis proposed more than a decade ago: that the the Internet will lead to the “Death of Distance” (or, less hyperbolically, the drastic minimization of the effect of distance).  Although intuitive, the empirical evidence for this hypothesis until now has been less than solid, partially because studies of this kind were difficult without the type of granular data that Olarreaga and colleagues were given access to.

Unfortunately, the international trade apparatus has been slow to embrace the Internet or evangelize the democratizing potential it has on international trade (in the sense it greatly expands the number of exporters who can successfully trade across borders).  Specifically, the WTO has done a relatively good job internally mapping issues related to the digital trade in goods and services, but “the progress made in terms of converting the thinking into action has been slow.”  That is to say that the WTO can point to few examples of Internet issues being addressed in binding commitments.

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The ITU, Internet Control, and Competition

by Ross Schulman on December 21, 2012

Clearly the Internet isn’t fundamentally necessary to the sort of competition we like to talk about here on a regular basis, but there can be no doubt that a free and open Internet with low barriers to entry encourages the sort of business approaches that lead to disruptions in markets. That’s why so many of the companies we talk about here are Internet related, and why we have been closely tracking the ITU’s World Conference on International Telecommunications (WCIT).In fact, I was there for the past two weeks as a part of the United States Delegation (these thoughts are my own, of course, and I’m not speaking for the US government), and blogged here at DisCo about some of the proposals a while ago.

The WCIT was a forum for the UN’s International Telecommunications Union to review one of its underlying treaties, the International Telecommunications Regulations (ITRs). The ITRs were written in 1988 and addressed low level questions of interconnection between international telephone and telegraph networks, including such details as who should pay who. This year, however, the ITU called a conference to update that treaty and some governments saw it as a chance to achieve what they had so far been unable to do: gain more control over the workings of the Internet. For a great behind-the-scenes look at what happened at WCIT, check out Eli Dourado’s summary over at Ars Technica from yesterday.

The final treaty text has a few provisions that cause concern for competition on the Internet. Mostly they give license to countries that already are looking for ways to control content on the Internet. For example, the treaty now has language on spam and cybersecurity in it, both of which clearly address the question of content of communications. We also gave you an update during the conference on the Internet-related provisions in the treaty. When governments get tacit permission to start toying with traffic across the network based on its contents, all sorts of evils become possible.

The Internet is such a great force for disruption because it is flat and open. Gatekeepers are not able to keep out smaller competitors, which forces all the parties to work to make a better product instead. When governments have international blessing to start investigating the contents of communications, they start picking winners and losers and disruption is often sacrificed.

That’s why it was great to see the US and many other nations refuse to sign the resulting document. While not a perfect resolution to the conference, the US government did a lot to keep the worst of the worst out of the treaty. Still, vigilance on this topic is of the utmost importance. The WCIT was just one battle in an ongoing war between those who prefer governments to control everything on the Internet and those who believe in an open and free exchange of ideas. We will be there to fight those future battles and we hope the Internet community will be too.

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The ITU’s Dead-of-Night Vote to Increase Regulatory Control of the Internet

by Ali Sternburg on December 13, 2012

Last night, an unexpected, unprecedented vote occurred at the World Conference on International Telecommunications (WCIT) in Dubai, a summit organized by the United Nations’ International Telecommunication Union (ITU), which may lead to greater regulatory control over Internet governance.  As IP-Watch noted, the WCIT Chair asked “ for a ‘sense of the room’ by a show of the name plates [and then] declared the resolution adopted by the majority of delegates.”  The vote carried, over the opposition of the United States and others.  Declan McCullagh explained that this occurred “after the head of the ITU, a U.N. agency, had promised not to hold votes on controversial topics, and appeared to take the U.S. and Europe by surprise.”  CCIA and others have been “sounding the alarm”, calling attention to this problematic development.  (See the association’s release from this morning explaining details and positions.)

DisCo contributors have written about WCIT before: CCIA’s Nick Ashton-Hart wrote a few weeks ago about how the WCIT proposals threaten the Internet’s disruptive potential, and violate international trade commitments.  Ross Schulman, who is currently on the ground in Dubai, has also written specifically about how ETNO’s ITU proposal would raise the cost of innovation on the Internet.

The Obama Administration came out on Tuesday united behind the free flow of information on the Internet, proclaiming:

The global consensus for a free and open Internet is overwhelming.  Millions in the United States and around the world have already added their voices to this conversation, and their position is clear: they do not want the WCIT to govern the Internet or legitimize more state control over online content.  Our Administration could not agree more – and will not support a treaty that sets that kind of precedent.

This is an ongoing development and we are paying attention.  While only governments can vote at the WCIT, there are platforms for staying informed and making your voice heard, such as a campaign by Fight For The Future, and another by Google.

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WCIT Proposals Threaten Internet’s Disruptive Potential and Violate International Trade Commitments to Boot

by Nick Ashton-Hart on November 28, 2012

As delegates from more than 190 countries converge on Dubai next week for the United Nations-sponsored World Conference on International Telecommunications (WCIT), the corps of representatives participating alongside them from both the telecommunications and Internet industries is a sign of just how central a role the dynamic between these two sectors will play at the proceedings.

The UN’s International Telecommunications Union (ITU) organized the meeting to significantly update its binding rules for the first time since 1988—a full seven years before the Internet was transferred to the commercial sector and before the WTO existed.  As those who follow disruptive competition know, a lot has happened since then and it is understandable the ITU would revisit rules designed for voice communications in a pre-Internet era.  Some see a raft of proposals on the table in Dubai as a way for telecommunications companies to more fully benefit from today’s data-driven economy; at the expense, critics say, of Internet companies and consumers in the form of increased regulation and access charges.

The debate over whether and how to regulate the Internet is not new, and WCIT is just the latest forum for long-running commercial and ideological disputes, including attempts to use regulation of commerce in favour of limiting speech that governments find uncomfortable.  There is a more straightforward and practical concern about the Dubai conference: Several proposals, if approved, would likely put member countries in violation of their existing international trade commitments.

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The Russian Internet Censorship Registry and the Future of Internet Freedom

by Daniel O'Connor on November 2, 2012

Yesterday, Wired’s Danger Room blog featured a great — although disturbing — blog post on Russia’s new Internet Registry going into effect.  Although the registry is ostensibly about combating internet pedophiles, the reality is that it is far broader and more insidious.  The statutory authorizing language tells the tale:

“A uniform registry of domain names and (or) the universal locators to pages of sites on the Internet and network addresses of sites on the Internet that contain information prohibited to spread in the Russian Federation.”

The operative language being “contain information prohibited to spread in the Russian Federation,” which includes court orders on “extremist” material, which in practice has often been extended to political opponents of Putin’s regime.  This uniform registry will make blocking and monitoring traffic from and to “illegal websites” much easier to implement.  Furthermore, the article cites the increased use of Deep Packet Inspection (DPI) technology to more granularly target offending material.

Although DPI technology may be used to make blocking more targeted — say blocking just the Innocence of Muslims video rather than all of YouTube — it also is deployed in much more sophisticated, sinister ways, such as the real-time monitoring, mirroring and manipulating of specific internet communications.  The Wired piece gives real examples of this practice:

The governments in many countries with questionable democracy and human rights records are fully aware of how to turn commercial advantages of DPI into the tool of suppressing dissent activity online. The secret services in Uzbekistan, for example, compel local providers to use DPI to change the URLs of discussion groups in social networks.

Technically, it poses no problem, Alexander Shkalikov of Inline Telecom confirmed. DPI allows for identification of those trying to access a site or page even if it’s blocked. “It’s possible to identify not only the IP, but logins, and that’s easier for the internet service provider. We advise our clients to configure DPI to work with logins. As a result they can have statistics about who is who. For example, some ISPs are interested in identifying who the spammers in their network are.”….

Technically [configuring DPI with Russia’s current legal intercept system] poses no problem, we were told by engineers dealing with DPI.  “Allot [a DPI provider] is perfectly compatible with SORM, and we know it,” Roman Ferster [CEO of RGRCom, who distributes Allot DPI systems] confirmed. “There is a very simple solution,” Alexander Shkalikov said. “We did it. [With] DPI, [we] can simply mirror traffic, not redirect it. This is very convenient because DPI [helps] you copy not all traffic but only a certain protocol or traffic of certain customers. For example, if you know that [Alexei] Navalny, one of the most famous opposition leaders, is a customer of a known operator, you may get all Navalny traffic to be copied through the DPI to the external system. It’s real. And it even shows you which sites he has been to.”

As the OpenNet Initiative has diligently cataloged (both on their website and in their book, Access Controlled), the Russian Federation (and other CIS states) have pioneered the development of these more sophisticated second and third generation Internet control methods (first generation being outright blocking of banned content) — many of which are made possible by DPI.

The emergence and increased sophistication of DPI has also altered the early cyber-utopian reality that accompanied a burgeoning Internet, voiced by John Gilmore almost two decades ago, that “the Internet interprets censorship as damage and routes around it.”  No longer is the Internet a libertarian mecca defying centralized control that many once thought it to be (if it really ever was, however, is debatable).

What the Russian registry is really about, as the testimony from the Wired article hints at, is reigning in the ability of the Internet to undermine government control and authority.  And with this new reality, we have arrived at a global governance inflection point.  The operative question for diplomats being: Will international governance bodies promulgate norms that elevate Internet freedom or state control as first-order priorities? MORE »

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