24 February 2014

Cyberspace March 2014

That old chestnut

The Sydney Morning Herald reported on 14 February 2014 that the Federal government was once again considering requiring ISPs to block websites that allow users to infringe the copyright of others, and provide a graduated response against the ISP account holder. Blacklists can be a problem, as weve seen in the past - the existing blacklist of really unpleasant sites even gets it wrong occasionally. The other worrying part of this announcement is that while it is completely wrong for people to steal digital content, punishing the internet account holder by cutting off access when the infringer may be a family member or housemate is wrong-headed.

This announcement is made more interesting in the light of a January 2014 paper (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2380522) about the French HADOPI three strikes piracy law introduced in 2009. This law also provided a graduated response and a government agency was created to administer it. In its original form the agency could issue several notices to an alleged infringer, and ultimately require an ISP to suspend internet access for up to a year. The authors (Arnold et al, from USA and French universities) analysed the impact of this law on individual behaviour in the light of their theoretical model.   Their results indicated that the law has no substantial deterrent effect. They also found that determined and knowledgeable infringers will find ways to steal content with a greatly reduced likelihood of detection - they wont use the well-known channels such as bittorrent. The authors found that there was a reduction in theft, but it was insignificant. 

If laws such as HADOPI do not affect the behaviour of infringers in a material way, it makes sense to find other methods. Like many crimes, there are the suppliers (such as the old Pirate Bay) and there is the demand side. Pursuing individuals on the demand side is resource-intensive, and requires justice to be administered on a case-by-case basis for it to be fair. Pursuing the suppliers seems to be the obvious route, just as it is with illegal drugs. Of course, another way to prevent theft of physical objects is to lock them up, which is where the digital content industry started - Digital Rights Management. DRM eventually became such a headache for all involved that it has largely been abandoned in the consumer space, except for some book suppliers such as Amazons Audible. Blocking piracy is a difficult problem, but we should be aware of proposals to cut off household (or business) internet access when there might be only one infringing person.


You have no doubt read stories about children making in-app purchases on Apple or Android devices, sometimes spending thousands of dollars feeding virtual unicorns or building farms. In-app purchases are becoming a preferred monetisation model over up-front purchases of the application. After playing a game for some days or weeks, the player runs into a wall preventing meaningful progress unless they purchase credits ranging from $5 to $100 or more. The USA Federal Trade Commission filed a complaint against Apple Inc, who in January agreed to pay at least USD$32.5M to settle the claim. Apple must also change its processes to avoid unplanned purchases. Apple had tried to limit the problem by only allowing a 15 minute window for purchases after the password had been entered (by the parent, one presumes). However, the parent may have thought they were only authorising one purchase. The Android store has an even longer window. The ACCC has released consumer advice on the problem which notes that getting a refund can be time consuming and difficult. Unfortunately, Australian consumers cant access the USA settlement.

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