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'Digital Market Manipulation' (University of Washington School of Law Research Paper No. 2013-27) by M. Ryan Calo comments that

 Jon Hanson and Douglas Kysar coined the term “market manipulation” in 1999 to describe how companies exploit the cognitive limitations of consumers. Everything costs $9.99 because consumers see the price as closer to $9 than $10. Although widely cited by academics, the concept of market manipulation has had only a modest impact on consumer protection law. 

This Article demonstrates that the concept of market manipulation is descriptively and theoretically incomplete, and updates the framework for the realities of a marketplace that is mediated by technology. Today’s firms fastidiously study consumers and, increasingly, personalize every aspect of their experience. They can also reach consumers anytime and anywhere, rather than waiting for the consumer to approach the marketplace. These and related trends mean that firms can not only take advantage of a general understanding of cognitive limitations, but can uncover and even trigger consumer frailty at an individual level. 

A new theory of digital market manipulation reveals the limits of consumer protection law and exposes concrete economic and privacy harms that regulators will be hard-pressed to ignore. This Article thus both meaningfully advances the behavioral law and economics literature and harnesses that literature to explore and address an impending sea change in the way firms use data to persuade.

Propertisation and Privacy

‘Who Owns Our Data?’, a seven page paper by Christopher Rees, argues that "the layman’s answer" lies in the question itself.

The common understanding of people when they talk about information about themselves is that it is indeed “theirs”. Until relatively recently, the law has been content to remain agnostic on the subject. The Common Law in general and English Courts in particular have traditionally avoided philosophical debates about the nature of things, preferring to develop concepts and principles from the results of cases decided on specific facts and circumstances. This approach has been acceptable while we have been winding our way gently up the foothills of the Information Age, but now that we see the towering peak of Big Data standing before us, covered by the ubiquitous Cloud, it is necessary to make a critical examination of some of the basic assumptions which we have hitherto carried with us about the way in which the law should treat rights over personal information. This paper will argue that the correct approach which the law should adopt is a proprietary one. That is to say that the protection of the economic value inherent in personal information should be grounded in property rights acknowledged by the law. 

Rees argues that

The contention of this paper is that, sooner or later, and possibly much sooner than might be thought likely, a judge ... will take the opportunity to lay down some ground rules for what might be loosely termed this new Law of Information. In the same way that Lord Atkin did, with such clarity and resonance in the landmark case for the law of negligence in Donoghue v Stevenson [1932] AC 563 it will then be seen that what has been creeping up, almost unnoticed, through the undergrowth has emerged into the bright and ever accommodating light of the Common Law is a fully articulated brand new branch of Property, called Personal Information. 

If the property model for Personal Information were to be adopted then far from becoming redundant, data protection laws will assume even greater relevance than hitherto. The reason for this is that search engines, data aggregators and social media sites who up to now have assumed that they own the data which they are harvesting will recognise that they have a vested interest in making sure that they following best practice in the way in which they acquire and use the information about individuals. What it will mean is that those data protection laws will not need to be so detailed and bureaucratic in their approach. Nor will one have vainly to try to rationalise the competing regimes for data protection which have grown up in the U.S, Europe and Asia. Property is a concept that all legal regimes recognise, so relying on the property right inherent in personal information will solve many of the current drafting problems for the legislators in this field. 

The property right approach will also save both industry and individuals money and energy. There will be no need for long winded privacy policies; there will just be a shared understanding of the trust based nature of the relationship between the in rem rightholder and the in personam collector of information. In this way, there will be created a healthier balance of risk and obligation as between owners of personal information and those whom they allow to process it on their behalf. The ownership paradigm will encourage the use of privacy enhancing technologies and state of the art security measures to protect data. Those who hold vast quantities of personal information will realise the risks inherent in losing the property of vast numbers of third parties and the risk of consequent class actions for damages for having done so. This will not eradicate the occurrence of security breaches, but it will encourage the use of better processes and systems for the protection of personal information, which was one of the fundamental aims of data protection law in the first place. And, the law of Information will have taken a significant step forward towards the sunlit uplands that await us in this ever fascinating Information Age.

Website Privacy Statements

The Office of the Australian Information Commissioner (OAIC) has announced "the results of a ‘privacy sweep’ of the websites most used by Australians".

As you might expect, both the results and the OAIC response are rather lame.

The OAIC states that

Almost 50 website privacy policies were assessed for accessibility, readability and content. The websites were also assessed against new transparency requirements in the Privacy Act that will come into effect on 12 March 2014. 

Australian Privacy Commissioner, Timothy Pilgrim, said the results of the sweep were mixed with 83% of the sites having one or more issues in the following areas: 'easy to find', 'easy to read', 'contacts for further information', relevance and length. 

'It is a concern that nearly 50% of website privacy policies were difficult to read. On average, policies were over 2,600 words long. In my view, this is just too long for people to read through. Many policies were also complex, making it difficult for most people to understand what they are signing up to,' Mr Pilgrim said. 

'We did see some instances where organisations provided both a simplified and full policy to assist their customers to understand what will happen to their personal information. This attempt to use 'layered' privacy policies is encouraging.' 

The statement notes that

Over 65% of the [47] privacy polices provided information that was not relevant to the handling of personal information, and was potentially confusing. One website did not have a privacy policy.

There's no indication of whether the Commissioner has responded with carrot, stick or a simple urgent 'please explain' to the operators of that site.

The Commissioner's own site - recently but very belatedly updated - has attracted strong criticism for low usability, with documents being hard to find (in some instances disappearing altogether), confusingly-described and not provided on a timely basis. It is thus encouraging to see that the Commissioner

also reminded organisations that, in addition to readability and length, it was important to consider accessibility issues. 

'Privacy policies need to be accessible by all users. This means that policies should be in formats that can be read by people using assistive technologies like a screen reader,' Mr Pilgrim said. 

The OAIC backgrounder indicates that

• 15% had a privacy policy that was hard to find on the website 
• 9% of sites reviewed either listed no privacy contact or it was difficult to find contact information for a privacy officer 
• Almost 50% of policies raised 'readability' issues, ie they were considered to be too long and difficult to read 
• The average reading age of the policies was 16. None of the full privacy policies met the OAIC's preferred reading age level of 14. The OAIC used the Flesch-Kinkaid Reading Ease test 
• More than 65% of privacy policies raised concerns with respect to the relevance of the information provided. For example, some sites with .au domain names were unclear about whether the site complied with the Privacy Act 1988.

The statement comments that

'With only 8 months to go until new privacy laws commence, organisations should be looking at their privacy policies now to ensure they comply with the new requirements. Organisations need to focus on these requirements and be open and transparent about their privacy practices. This will give people a better understanding of how their personal information will be handled so that they can make an informed decision about doing business with the organisation.' 

To comply with new Australian Privacy Principle 1, organisations must have a clearly expressed and up to date privacy policy.

That compliance is, of course, in the eye of the Commissioner - with the PC/OAIC historically tending to be quite permissive. The statement indicates that the OAIC will use the findings "to inform the development of guidance about privacy policies for organisations in the lead up to March 2014".

In a forthcoming article I suggest that we need to be more positive and do more. We could for example mandate accessibility, along the lines of the Australian Spam legislation and the US Financial Services Modernization Act (Gramm-Leach-Bliley Act).

Copyright CEOs

CEO Compensation in the Copyright-Intensive Industries [PDF], a 53 page report by Jonathan Band and Jonathan Gerafi at InfoJustice notes that -

In June 2013, we produced a study on the profitability of copyright-intensive industries. We compared the performance over the past ten years of five leading firms in three copyright-intensive industries -- motion pictures, publishing, and software -- with the performance of five leading firms in three other industries: construction, transportation, and mining. We found that the firms in the copyright-intensive industries were more profitable than the firms in the other industries in every period examined.

In this study, we compare the compensation of the chief executive officers of these same 30 firms over the past six years. We found that in each year, the CEOs of the firms in the copyright-intensive industries received significantly higher compensation than the CEOs of the firms in the other industries. For example, in 2012, copyright-intensive industry CEOs received $22.9 million in compensation on average, while the CEOs in the other industries received $7.4 million on average. In other words, the 2012 compensation of copyright-intensive industry CEOs was more than triple the compensation of CEOs in the other industries. During the entire six-year period, copyright-intensive industry CEO compensation on average was 2.8 times higher than CEO compensation in the other industries. Moreover, between 2007 and 2012, CEO compensation in the copyright-intensive firms grew by 45%, while it increased by only 8% in the other industries.

Additionally, CEO compensation as a percentage of revenue was more than twice as high in the copyright-intensive industries as in the other industries. CEO compensation as a percentage of revenue in the publishing industry was four times higher than in the transportation industry, almost three times higher than the non-copyright average, and twice as high as in the motion picture industry.

In the copyright policy debates, the labor unions representing workers in copyright-intensive firms have joined with management in demanding greater intellectual property protection. Indeed, copyright policy is one of the few areas where the AFL-CIO and the U.S. Chamber of Commerce routinely agree with one another. They contend that copyright infringement is causing job loss in the United States. Nonetheless, during this period when the copyright-intensive industries purportedly are losing jobs because of attacks by pirates, CEO compensation has increased dramatically, both in absolute terms and relative to CEO compensation in other industries. These generous compensation packages belie the suggestion that the copyright industries confront an existential threat from infringement. Moreover, these upwardly trending compensation levels demonstrate that the copyright-intensive industry CEOs are not sharing the pain infringement allegedly causes their employees.

Genre

'Patents as Genre: A Prospectus' by Dan L. Burk and Jessica Reyman in 25 Law & Literature (Forthcoming) argues that

 Like other forms of intellectual property, patents have increasingly been the subject of controversy regarding their successes and failures in promoting and channeling innovation. But unlike other forms of intellectual property, patents are constituted and defined in terms of officially sanctioned texts. As a consequence, patents are deeply embedded in communities of composition, interpretation, and practice. In this paper we outline how genre analysis can be applied to interrogate the "typified rhetorical action" of the patent system and its constituent communities. We argue and demonstrate that understanding the rhetorical work of patents is key to addressing current criticisms of the patent system.

They comment that

What might the rhetorical features of patent documents reveal about the workings of the patent system and the underlying ideologies of the patent community?7 One method for further exploring the role of rhetoric in the patent system is genre theory methodology. In this paper, we argue that the modern patent is a compelling subject for such genre analysis and that genre analysis points the way to a better understanding of the social role played by patents. We begin by sketching the general outline of the patent as a document, its distinctive characteristics, the unique community that drafts and processes the document, the agencies and institutions that have developed around the document, and the other features relevant to genre analysis. We discuss both linguistic characteristics of the patent document as well as its social character as the product of a community of patent practitioners. In doing so, we trace the connections between the production of patents and the development of the patent community, concluding that this interaction is key to understanding the unique role of patents. 

In doing so we are mindful of both the influence of the document on its associated communities, and the concomitant influence of the communities on the document. These communities of course overlap and intercalate to varying degrees. But here we focus on the community most responsible for the determining the structure and composition of the patent document, the community of patent practitioners registered to practice before the Patent Office. We expect that examining both the text and context of the patent genre will help shed light on the norms, ideologies, and values circulating among patent practitioners, as well as upon those embedded in the patent document itself. ... 

... the social action of patents is not so much about innovation as it is about communal understanding and rhetorical performance. This conclusion differs radically from the assumptions underlying current patent debates, which focus on the economics and technological acumen of firms that produce inventions. But the system we describe here is a system for producing certified texts, rather than a system for producing innovation, which may be a different undertaking altogether. 

Genres are the textual sites at which a discourse community’s work is accomplished. We have in this preliminary study begun to sketch the contours of the patent genre and its associated community, showing the interplay between document and discursive community, and the social action that flows from that interplay. In doing so, we hope to have laid the foundation for future exploration of a rich field of rhetorical activity that has compelling currency for social policy. Such further studies might include analysis of additional features of the document, examination of the written interaction between Patent Office and reviewing courts, consideration of the structure of other types of patents besides the basic utility patent we have described here, or detailed investigation the intricate genre ecologies of the file wrapper. 

Such topics are worthy of detailed study in their own right, but may also have broader implications. For example, we have mentioned the historical influence that the patent community has had on the development of the patent document and its standards for certification; this interaction is not merely a historical curiosity, but a contemporary reality. In addition to specialty groups within state bar associations, patent practitioners also have their own very active national professional organization, the American Intellectual Property Law Association, which has historically been dominated by patent lawyers. Through such organizations the community has been active in advocacy and lobbying activity, including vocal involvement in the recent package of statutory reforms constituting the America Invents Act. Thus the community of patent drafters has shaped the form of the patent document, not only directly through evolving compositional practice, but by formal lobbying and informal influence over the regulations and statutes governing the patent. Consequently, the evolution of a different text – the patent statute – becomes an important mediating node between the patent community and the shape of the patent document. Similarly, the shape and formation of institutions such as the Patent Office and the Federal Circuit, which certify and interpret patents, have been influenced by the practice community. 

In each of these contexts, the community reflected in and shaped by the patent genre displays distinguishing characteristics which may be better understood by considering patents as genre. As the importance of patents, and need for closer examination of patents rises, it is worth investigating the interplay of documents used to establish patents and the methods used for writing and reading them. While we have not attempted to outline any sort of reform or recommendations for the patent system, we do conclude that genre study heightens our understanding of the patent community’s norms, epistemology, and ideology; and such information tells us a good deal about the meaning of patents and the social role that we have assigned to them. Understanding these dimensions of patenting lays a critical foundation for discussions of patent practice and patent reform.

Migration and Loyalty Oaths

'Liberalism, Allegiance, and Obedience: The Inappropriateness of Loyalty Oaths in a Liberal Democracy' by Liav Orgad in (2014) Canadian Journal of Law and Jurisprudence (Forthcoming) -

examines the wisdom of loyalty oaths as a legal institution in contemporary liberal democracies. First, using comparative analysis the Article highlights the growing global interest in loyalty oaths. Second, based upon historical evidence the Article explores the functions of loyalty oaths and assesses their role. Third, through using legal analysis the Article challenges the validity of loyalty oaths and identifies three fundamental concerns related to their content and form: the rule of law, freedom of conscience, and equality. 

The Article reveals liberal concerns associated with the added value of the duty of "loyalty to the law" (allegiance), as distinct from the duty to "obey the law" (obedience). It presents an ongoing tension between loyalty and liberalism and argues that the more loyalty liberal democracies demand, the less liberal they become. The Article concludes that loyalty oaths yield high costs but have low benefits and suggests that liberal states should abandon them as a legal institution.

Orgad comments

The Article explores one manifestation of loyalty in liberal philosophy and political practice—loyalty oaths for immigrants. In many democratic states, immigrants seeking to become citizens must take a loyalty oath. Although the content and form of the oath varies, its common feature is that it is mandatory—a prerequisite for citizenship. Loyalty oaths are particularly interesting because they are a unique platform to examine the interrelationship between constitutional law and immigration law. Oaths serve as a means for an immigrant to subscribe to the tenets of the community. However, before imposing an oath on newcomers, the community must define its tenets. The substance of the oath we demand of them is about us. Immigration policy, thus, echoes constitutional identity by mirroring not only the qualities that we value in others but also by reflecting what defines us. 

At first glance, citizenship oaths do not raise serious problems of political philosophy. After all, an oath only entails reciting a few words in a public ceremony. However, a closer review reveals forceful reasons against the use of loyalty oaths in liberal societies. First, the duty of loyalty, imposed on naturalized persons, seeks to influence one's character traits, emotional attitudes, and internal beliefs; it requires more than just the liberal duty of conformity to the law. Second, the obligation to take a loyalty oath in order to secure citizenship may be seen to limit individual liberties of the oath-takers, infringe upon their freedom of conscience, and in fact discriminate against naturalized citizens compared to natural-born citizens, who never must take the oath. In spite of these strong claims against loyalty oats, the institution of the oath remains an understudied topic. 

The Article argues that the use of loyalty oaths is a symptom of a genuine problem in the liberal theory. In some forms, liberalism means to obey the law and otherwise be left alone. But stronger forms of liberalism further require belief in liberal values and institutions. The justification for requiring it is grounded on liberal itself—its being essential for upholding individual liberties.  The challenge has always been how to preserve liberal values and institutions without crossing the liberal line into ‘indoctrination.’ However, when the benchmark of loyalty becomes belief rather than behavior, when it is faith rather than action, it gets close to the point of not being liberal, even if its goal is to keep liberalism alive. The more loyalty liberal democracies demand, the less liberal they become. When liberal democracies appeal to "loyalty to the law" (allegiance)—and not just "conformity with the law" (obedience)—they challenge liberalism itself. The Article concludes that loyalty oaths yield high costs but have low benefits and suggests abandoning them as a legal institution. 

The Article proceeds as follows: Part I reveals a global trend in comparative immigration law—the growing appeal to loyalty oaths. Part II shows that modern law still embraces a duty of allegiance in addition to the general duty of obedience and explores the differences between them. Part III traces the functions of loyalty oaths and demonstrates that, regardless of the oath's historical purposes—being a form of social contract, political test, and nation-building symbol— its modern purpose is vague. Part IV presents three liberal problems raised by loyalty oaths: 1) they infringe upon the rule of law; 2) they violate freedom of conscience; and 3) they discriminate against naturalized citizens compared to natural-born citizens. Part V concludes.

Broken Hearts, BS and Benchmarks

After looking at online dating services the UK Information Commissioner has commented that “There are questions around how people’s information is being used that need to be answered”.

The Commissioner's media release states that

 The ICO has written to four of the biggest UK online dating companies, after questions were raised about how some dating websites are handling personal data. The letters follow a recent survey by the ICO of major UK dating websites, which identified areas where the Data Protection Act was not being followed. 

The ICO has now written to the four biggest UK-based providers of online dating services, highlighting the main areas of concern that the survey found. The companies are asked to respond with how they are meeting those concerns. 

The areas of concern highlighted include: 

• Poor visibility of the terms and conditions that give the website consent to use personal information in certain ways 

• Those terms and conditions making reference to the dating company having ‘perpetual’ or ‘irrevocable’ licence to use members’ data 

• Websites claiming to take no responsibility for the loss of or damage to personal information 

• Users being expected to provide personal details before the terms and conditions are provided

The letters have been sent to eHarmony, match.com, Cupid, and Global Personals, as well as the industry trade body, the Association of British Introduction Agencies. 

The work by the ICO’s enforcement team comes as BBC’s Panorama programme reports on the scale of apparent unscrupulous practices being employed by some dating websites. 

Simon Entwisle, ICO’s Director of Operations, said:

The evidence we’re being presented with by the media suggests quite concerning business practices by some dating websites, and there are particular questions around how people’s information is being used that need to be answered. 

It’s concerning to see that there appear to be sites which, as a matter of course, are falling far short of the legal standards for ensuring information is accurate and up to date. 

While media reports are painting a disturbing picture, the number of complaints we’re getting from the public is not very high. That could be because this is only an issue with a small minority of websites, or it could be because people are reluctant to come forward. The work we’re doing now will help us to better understand the scale of the issue.

There's no reason to believe that poor practice is restricted to the UK.