A New Framework for Protecting Consumers on the Internet Peter P. Swire Ohio State University & Center for American Progress Center for American Progress Conference on Consumer Protection & the Internet Conference on Consumer Protection & the Internet July 24, 2006 July 24, 2006

Overview The Internet: The Internet: Personal mainframe Personal mainframe Unlimited connectivity Unlimited connectivity Framework as part of ongoing research Framework as part of ongoing research Enforcement: elephants and mice Enforcement: elephants and mice New issues New issues The last mile The last mile Personal information Personal information Consumers as producers Consumers as producers Disclaimer: my personal views Disclaimer: my personal views

Elephants and Mice Elephants: Elephants: Large & powerful organizations Large & powerful organizations Large retailers, etc.Large retailers, etc. Vulnerable: Vulnerable: Practically impossible to hide, have assetsPractically impossible to hide, have assets Thick-skinned Thick-skinned LobbyistsLobbyists Defense attorneys for enforcementDefense attorneys for enforcement Much the same for offline & online enforcement Much the same for offline & online enforcement

Mice Small, nimble, multiply quickly Small, nimble, multiply quickly E.g., phishing E.g., phishing New s constantly New s constantly New web sites New web sites If filter or take down site, new attacks If filter or take down site, new attacks Often have nests overseas Often have nests overseas Main strategy for mice – stay hidden Main strategy for mice – stay hidden

Other Mice Activities Phishing Phishing Spam Spam (Nigerian) frauds (Nigerian) frauds Viruses, worms & drive-by downloads Viruses, worms & drive-by downloads Kiddie porn Kiddie porn Piracy and other P2P uses Piracy and other P2P uses

A Better Mousetrap? Major themes for consumer protection and enforcement: Major themes for consumer protection and enforcement: International enforcement International enforcement Technological expertise in-house, to support enforcement the way economists support antitrust enforcement Technological expertise in-house, to support enforcement the way economists support antitrust enforcement For elephants, enforcement is largely the same as offline For elephants, enforcement is largely the same as offline Key challenge is to prove the facts in a case Key challenge is to prove the facts in a case

New Consumer Issues Last Mile – the Internet needs connectivity Last Mile – the Internet needs connectivity Connectivity as the new utility Connectivity as the new utility History of monopoly concerns for utilities History of monopoly concerns for utilities Query – when do innovation & competition make this utility different from the history? Query – when do innovation & competition make this utility different from the history? Discrimination – net neutrality & regime for carriers not restricting content Discrimination – net neutrality & regime for carriers not restricting content Wifi & McChesney/Podesta article on the historical role of public competition in taming private utilities Wifi & McChesney/Podesta article on the historical role of public competition in taming private utilities

Personal Information VA laptop & personal mainframes VA laptop & personal mainframes > 20 million individuals at risk > 20 million individuals at risk Multiple market failures Multiple market failures Intrusion – spam, telemarketing Intrusion – spam, telemarketing Data breach Data breach Privacy & violation of policies Privacy & violation of policies Overuse of unique identifiers Overuse of unique identifiers Large & growing set of issues Large & growing set of issues

Consumers as Producers Ordinary consumers can produce: Ordinary consumers can produce: Blog Blog Digital photos Digital photos Create, sample, and mix video & audio Create, sample, and mix video & audio Sell worldwide – online auction sites Sell worldwide – online auction sites Collaborate – Wikipedia Collaborate – Wikipedia Write software – Linux & other Open Source Write software – Linux & other Open Source

Harm to Consumers Information consumers are information producers Information consumers are information producers Consumer harm when their production is limited, when the computer is locked down Consumer harm when their production is limited, when the computer is locked down Many consumer actions are for non-commercial goals: Many consumer actions are for non-commercial goals: Leisure – its fun Leisure – its fun Creativity & self-expression Creativity & self-expression Build community Build community Political speech Political speech

Consumers are Producers History of intellectual property History of intellectual property Focus on professional & industrial producers Focus on professional & industrial producers PTO, Copyright Office designed for that PTO, Copyright Office designed for that Today, consumers create IP Today, consumers create IP What institutions will do consumer protection for consumers-are-producers? What institutions will do consumer protection for consumers-are-producers? Also, issue of when consumers are subject to producer rules Also, issue of when consumers are subject to producer rules Ad substantiation and the FTC for blogs, etc. Ad substantiation and the FTC for blogs, etc.

Consumer Protection & the Internet The Internet: The Internet: Personal mainframe Personal mainframe Unlimited connectivity Unlimited connectivity Enforcement: elephants and mice Enforcement: elephants and mice New issues New issues The last mile The last mile Personal information Personal information Consumers as producers Consumers as producers A framework for study, for this year & beyond A framework for study, for this year & beyond