Shaping Competition on the Internet: Who Owns Product and Pricing Information?

Historically, markets have almost always fallen short of satisfying the conditions for and providing consumers with the benefits of perfect competition. Certain characteristics of electronic markets, however, enhance the possibility that e-commercel will be conducted in an environment that comes closer to attaining the perfectly competitive ideal than that of most conventional markets. Essentially, technology analogous to that which users already employ to search the Internet can also enable this retailing revolution by allowing consumers easily to obtain comparative product and pricing information. However, for a number of reasons, on-line merchants (e-tailers), are asserting a variety of legal claims that, if successful, will hamper consumers\u27 abilities to use the most efficient tools to obtain this information. In particular, if courts adjudicating these claims apply existing property law governing tangible items to Internet activities without considering that medium\u27s unique nature, they may inadvertently, but nevertheless effectively, confer upon web site owners exclusive rights to their product and pricing information tantamount to ownership. One of the requisites for perfect competition is the costless exchange of information. If e-tailers can control the most efficient means of access to and the accompanying dissemination of their product and pricing information, they may impede movement toward the ideal. Why would they seek this control and how should the law respond? The answers to these questions, particularly the latter, will largely determine the nature of competition on the Internet, including the balance of power between producers and consumers. Part I of this Article explains the theory of perfect competition, and both why the Internet could facilitate it and why it apparently has not yet done so. Part II considers why and how some sites are seeking to protect their otherwise publicly available product and pricing information from particularly those users obtaining it through automated means. Some of these sites\u27 motivations are anti-competitive while others are not. The law must consider how best to structure competition on the Internet in light of both these conflicting purposes and the interests of consumers in having easy access to such information. Part III examines the legal landscape, analyzing some of the claims sites are raising. This evaluation reveals the inadequacies of simply applying existing law to new technology. Part IV proposes a test to address complaints arguing that unwanted visits to a web site should be legally prohibited. It then briefly considers the broader normative question: What should e-commerce look like? Part IV concludes by contending that, at this early state of Internet technology, policymakers would do better to err on the side of weaker rather than stronger property rights. This decisional framework may change over time as the market develops, but provides a reasonable starting point

Chevron, Cooperative Federalism, and Telecommunications Reform

In this Article, Professor Weiser argues that the advent of cooperative federalism statutes, like the Telecommunications Act of 1996, calls for a new conception of federal court review of state agency decisions. In particular, Professor Weiser suggests that federal statutes that invite state agencies to interpret federal law subject only to federal court review should be interpreted as calling for a deferential standard of review. Such a standard, to be sure, would allow cooperative federalism statutes to mean different things in different states. But as Professor Weiser illustrates with reference to the Telecommunications Act, the very nature of cooperative federalism statutes encourages states to implement and experiment with alternative regulatory models to meet local needs and desires. Moreover, the underlying rationales of the Chevron doctrine-which require a deferential standard of review of federal agency decisions-clearly militate in favor of deference to state agencies as well as federal ones. Nonetheless, highighting the need to preserve the uniform application of federal law, the federal courts have concluded in theory that they will not defer to state agencies, while in practice they have consistently looked for ways to defer to state agency decisions. Thus, only by recognizing that uniformity in federal law reflects a goal and not an absolute mandate--and deferring to state agencies where Chevron recognizes that courts should not second-guess agency decisions-can the federal courts facilitate the emergence of the cooperative federalism state and extricate themselves from the highly technical policy issues that Chevron properly assigns to agencies

Anything Goes: Examining the State\u27s Interest in Protecting Children from Controversial Speech

Protecting children from contamination by speech has become the focus of national attention. The content of the protected speech that the state seeks to regulate is as varied as the form of communications targeted, including the allegedly indecent, sacrilegious, and violent in media ranging from books to the Internet. Echoing similar crusades to protect children from virtually every new form of entertainment over the last century, contemporary regulatory efforts to protect children reflect the unique legal status of children and the fragility of constitutional liberties where their vulnerabilities are invoked. But content-based restrictions on speech-even in the name of protecting young people--presumptively violate the First Amendment, which mandates above all else.., that government has no power to restrict expression because of its message, its ideas, its subject matter or its content. \u27 Strict scrutiny under the Speech Clause requires the government to demonstrate a compelling interest in regulating speech based on its content and to show that a real harm exists which the restriction on speech will redress. Confronted with the incantation that the state aims to safeguard children, courts at every level, including the Supreme Court, have regularly failed to scrutinize the interest alleged by the government. This lack of analysis is all the more striking be- cause the speech at issue in this Article is protected under the Constitution. It is neither legally obscene nor used in the service of criminal acts against children. Both of these categories of speech are unprotected, and are subject to criminal prosecution under pertinent statutes. Although many parents and other adults might wish it were otherwise, the Supreme Court has recognized that as long as controversial speech is available, some enterprising youngsters will find it.\u27 The Supreme Court has conceded that no fail-safe methods can block the most determined teen, especially since government regulations based on content must be narrowly tailored. The Supreme Court has long held as inviolable the principle that even the desire to protect youth will not allow the state to reduce the adult population.., to reading only what is fit for children. Regardless of the strength of the government\u27s interest in protecting children, the Court has insisted that [t]he level of discourse reaching a mailbox simply cannot be limited to that which would be suitable for a sandbox. One case stemming from efforts to shield children from controversial speech was recently argued before the Supreme Court and a second is likely to reach the Court during the next term: Playboy Entertainment Group v. United States ( Playboy II ), involving control of transmissions from subscription adult cable channels so that they do not inadvertently reach non-subscribers, and ACLU v. Reno ( ACLU IT), involving the Child Online Protection Act ( COPA ), which limits commercial computer communications deemed harmful to minors. Over the last decade, the Supreme Court has ruled on three other cases involving the constitutionality of federal efforts to regulate speech in order to shelter children from content: Sable Communications, Inc. v. FCC, Denver Area Educational Telecommunications Consortium, Inc. v. FCC, and Reno v. ACLU ( ACLU1\u27).\u27 In each instance, the Court rejected the state\u27s argument that the goal of shielding children justified significant intrusions on constitutionally protected speech; in each instance, the Supreme Court overturned all or part of the statute at issue. The holding in each of the cases in the trilogy reiterated the Supreme Court\u27s express statement in Interstate Circuit v. City of Dallas that the salutary purpose of protecting children does not insulate government action from constitutional scrutiny. But remarkably, in each of these three cases, the Supreme Court ignored its own dictates by failing to analyze the state\u27s asserted compelling interest. Instead, the Court readily accepted the asserted interest in passing, but found that Congress had exceeded the boundaries of the Speech Clause in promulgating the specific regulation.\u27 Legal questions about the regulation of speech to shield children are likely to recur with increasing frequency, judging from the docket of pending legislation and statutes not yet tested in the courts

Limitations of the 1999 Work-For-Hire Amendment: Courts Should Not Consider Sound Recordings to Be Works-For-Hire When Artists\u27 Termination Rights Begin Vesting in Year 2013

The legal issue that is the subject of this Note was once nothing more than a curious topic of debate among attorneys who represent recording artists. When I began researching the topic in June of 1998, several artists\u27 attorneys explained the problems with language customarily inserted in record contracts by record companies claiming that the artists\u27 sound recordings are work made for hire. Most artists\u27 attorneys have always disagreed with this work-for-hire language, believing it to be a misguided interpretation of the law, but they have always known that the contractual language could not legally bind their clients. Instead, the issue of whether a sound recording is a work-for-hire has been considered a question of statutory interpretation that courts would one day decide in favor of artists.\u27 Until November 29, 1999, artists\u27 attorneys had rested on the assumption that the issue whether sound recordings are works-for- hire would be decided by courts around year 2013. Beginning in that year, the so-called right of termination would have entitled artists to reclaim their copyrights after proving that their sound recordings are not works-for-hire under the 1976 Copyright Act. Congress, however, eliminated artists\u27 termination rights with a recent Copyright Act amendment expanding the definition of work made for hire to include sound recordings.\u27 The artists\u27 rights to reclaim valuable streams of royalty revenue generated by their sound recordings was the result of years of negotiations between private interests, a number of Copyright Office studies, and careful consideration by the 94th Congress in 1976; Congress eliminated these rights with the stroke of a pen in 1999. If Congress had not suddenly intervened, courts would have found that artists\u27 sound recordings are not works-for-hire in accordance with equitable principles,\u27 legal precedent,\u27 and congressional policy underlying the 1976 Copyright Act.\u27 A United States District Court recently reached this conclusion. On March 5, 1999, the court in Ballas v. Tedesco held that sound recordings are not a work-for- hire under the second part of the statute because they do not fit within any of the nine enumerated categories. Unfortunately, Congress passed the 1999 amendment without considering equitable principles, legal precedent, or the uniquely intricate compromise underlying the 1976 legislation

Analyze This: A Law and Economics Agenda for the Patent System

Patent law as a field of academic study has benefited enormously from the attention of economists. Indeed, law professors are relative newcomers to the academic patent field, trickling in behind the economists in small but growing numbers as patent law evolves from an arcane, practitioner-taught specialty to a less marginal role in law school curriculums.\u27 Yet considering the prominence of economists in academic discourse about the patent system, they have had relatively little impact on patent law and policy. One reason for this disparity between the role of economists in the academy and in policy arenas may be the indeterminacy of economic analysis in evaluating the patent system. Another reason may be a failure on the part of some economists to focus their analysis on the kinds of decisions that courts and policy-makers confront in the course of administering and fine-tuning the patent system. This is a missed opportunity of more than academic significance. The pros and cons of the patent system are getting more attention right now than they have in many years. By some measures, the patent system appears to be in ascendancy, expanding into previously hostile regions of the world, previously patent-free fields of endeavor, and previously nonproprietary research settings. Yet the patent system is provoking controversy along the way, as skeptics question whether these patents are on balance promoting technological progress or retarding it. Interest in patents has become sufficiently widespread to command the attention of busy world leaders, as well as prominent treatment in the popular press. In this environment, policy-makers are particularly likely to be receptive to scholarly input aimed at ensuring that the patent system does less harm than good. Legal scholars and economists might enhance the value and impact of their work by making more effective use of each other\u27s knowledge and capabilities. Legal scholars can offer a more nuanced understanding of the legal rules that underlie the patent system and the doctrinal levers that might be manipulated in furtherance of public policy goals. Economists bring to bear a set of analytical and methodological tools that could shed considerable light on what these doctrinal levers are doing and which of them we ought to be manipulating. Together, we have a better chance of asking the right questions and thinking about them in a useful way

Dude, Where\u27s My Car Title?: The Law, Behavior, and Economics of Title Lending Markets

Millions of credit-constrained borrowers turn to title loans to meet their liquidity needs. Legislatures and regulators have debated how to best regulate these transactions, but surprisingly, we still know very little about the customers who use title loans. This Article reports findings from the first large-scale academic study of title lending customers. We surveyed over 400 title lending customers across three states and obtained information about customers’ demographic and behavioral characteristics. Based on the results of our survey and guided by insights from behavioral economics, this Article seeks to reframe the title lending debate. Instead of focusing on the risks and consequences of borrowers’ cars being repossessed, as the vast bulk of the literature does, we argue that the primary problem that most borrowers face is underestimating the true cost of taking out a title loan. Borrowers’ survey responses demonstrate that many borrowers are overly optimistic and experience self-control problems that affect their ability to make timely loan payments. We argue that these deviations from the assumptions of classical economics do not warrant an outright ban of title lending, but they do provide room for policy interventions. Policymakers can improve efficiency in title lending markets by requiring lenders to disclose to consumers the likely experiences they will have with their title loans rather than merely requiring lenders to communicate pricing information

Fee Shifting and Incentives to Comply with the Law

Law and economics is a top-heavy discipline, in the sense that it is largely theoretical. Empirical tests of its claims have been carried out only recently, and a great deal remains to be done. The larger part of the recent wave of empirical law and economics research, however, examines the litigation process. This research has focused on the frequencies with which lawsuits are brought and with which they are settled. Surprisingly, empirical researchers have given little attention to the theoretical literature that makes predictions concerning incentives to comply with legal rules and the optimality of compliance equilibria. This lack of attention is disappointing because compliance theory has a greater claim to being core, or central, to the law and economics literature than does litigation theory. The reason for the uneven fit between empirical and theoretical re- search agendas is clear: it is difficult to observe the effects of legal standards on ordinary behavior outside of the courtroom. How, for example, should one go about determining the effect of the negligence rule on the caretaking behavior of drivers? Nature provides few experiments and the cost of creating the required experiments is prohibitive. In the area of fee shifting, for example, courts and commentators have long justified deviations from the American fee shifting rule by referring to effects on compliance incentives.4 Not a shred of empirical evidence on the compliance effects of alternative fee shifting rules exists, however, and it is unlikely that it ever will, given the cost of the required experiments

Hypnotic Memories and Civil Sexual Abuse Trials

In the next few paragraphs, the reader will eavesdrop on a psycho- therapy session. During this session, the therapist uses hypnosis, a common technique in clinical practice today. In the past, the legal system has paid little attention to the memory retrieval techniques used in psychotherapy because statutes of limitations have prevented patients from using memories of childhood wrongs uncovered in adult psycho-therapies to bring suit. However, recent changes will force the legal system to examine whether the memory restoring techniques used in psychotherapy can produce memory that is trustworthy enough for the legal system to accept. What follows is a tragically common case history, a successful treatment, and a policy-loaded legal issue

Drug Couriers and the Fourth Amendment: Vanishing Privacy Rights for Commercial Passengers

Increased drug enforcement initiatives within the United States parallel the international\u27 escalation of the war on drugs. Curbing the flow of narcotics into the country has seemed an unconquerable task.The tremendous influx of illegal substances and the heightened domestic production of both natural and synthetic\u27 drugs prompt governments at every level to attempt to restrict drug trafficking within the United States.\u27 The enforcement escalation is highlighted by a vociferous executive and congressional commitment to the eradication of the drug problem, improved drug detection technology, and a dedication of increased manpower and resources to enforcement efforts.\u27 Detecting illegal substances during transportation is a logical and convenient focus of drug control efforts. Imports of drugs are concentrated along the coasts, through international airports, and along the southern borders. After the drugs enter the United States drug traffickers must transport their goods throughout the country for distribution. Seizing the opportunity to contain the flow of illegal substances, the police and other drug enforcement officials enhance surveillance of commercial transportation systems, highways, private planes, and boats in order to detect couriers during transit. Increasingly, however, surveillance efforts challenge established concepts of privacy

Federal Preemption and Clean Energy Floors

Federal policies regarding renewable and clean energy often lack clear definition, are incomplete, and are scattered across multiple statutes and agencies. Yet at the same time, recent decisions of both federal agencies and courts have attributed a preemptive effect to federal statutes that threatens to hobble innovation in renewable and clean energy policy by subnational regulators. One consequence of this approach is that most significant policies promoting clean and renewable energy are channeled toward subsidies from the federal fisc, rather than diverse policies undertaken independently by state governments or regional customers and suppliers. This Article argues that, contrary to many agency and judicial decisions, the text, structure, history and purpose of key federal statutes does not require a singular approach to federalism in clean energy policy. Borrowing from environmental law, we plant a flag for a preemption approach that we call the clean energy floor, and show that this is consistent with the history and structure of federal energy legislation, including both New Deal and more modern statutes. As a normative matter, we also argue that reading of federal energy statutes to incorporate regulatory floors is a good idea, to the extent that it allows federal and state energy regulators an opportunity to work together to overcome problems of fragmentation, stagnation and stalemate -- and especially to address important issues related to climate change and new technologies such as renewable energy and fracking, even absent new congressional action or completely defined federal policy. Our approach to clean energy federalism also has some important implications for how courts should interpret other statutes in the regulatory contexts where federal and state authority are often perceived as substitutes for one another, such as health care