Confidentiality and Privacy Damages

'Characterisation Of Breach Of Confidence As A Privacy Tort In Private International Law' by Michael Douglas in (2018) 41(2) University of New South Wales Law Journal 490 comments

 Certain kinds of breach of confidence may be characterised as torts, at least for the purposes of Australian private international law, in respect of rules of jurisdiction and choice of law. When a breach of confidence involves a misuse of private information, a tortious characterisation is appropriate. This view is consistent with appellate authority recognising the unique character of equitable jurisdiction. The article begins by considering debates concerning the juridical basis of breach of confidence, and its metamorphosis into the tort of misuse of private information. The very existence of that debate indicates that breach of confidence may intelligibly have more than one character. The substantive principles of breach of confidence inform the way that cross-border problems ought to be resolved in private international law. The remainder of the article considers characterisation in respect of long-arm jurisdictional rules, and then in respect of choice-of-law rules. 

Douglas argues

It is a trite observation that serious invasions of privacy may occur with increasing ease in the digital era. Mobile technology facilitates intrusion upon seclusion; the internet facilitates sharing of improperly obtained information. Lawmakers have responded to this environment by criminalising ‘revenge pornography’, while social media platforms like Facebook have taken steps to improve their self-regulation mechanisms to protect potential victims.  But despite these developments, Australian law does not offer the civil remedies for invasions of privacy which are available in other Commonwealth legal systems. The High Court declined to recognise a common law privacy tort in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd. The Australian Law Reform Commission’s 2014 recommendations for a statutory tort were largely ignored, as were more recent state-based recommendations. 

In at least two Australian cases, superior courts have adapted the general law to vindicate violations of privacy. In Giller v Procopets, the Court of Appeal of the Supreme Court of Victoria held that equitable compensation would be available in relation to distress arising from a breach of personal privacy that was framed as a breach of confidence claim. Apart from its equitable jurisdiction, the Court also relied on Victoria’s incarnation of the Lord Cairns Act. More recently, in Wilson v Ferguson, the Supreme Court of Western Australia followed Giller v Procopets and awarded equitable compensation for distress arising from an instance of revenge pornography in the context of a breach of confidence claim. Although there is no tort of invasion of privacy in Australia, these decisions may lend support to the view that, at least in some cases, breach of confidence might be characterised as an ‘equitable tort’. Some have advanced these kinds of arguments for years. They do so bravely, treading ground which is susceptible to derision with the ‘fusion fallacy’ label. This article avoids that debate by limiting its analysis to the characterisation of breach of confidence in private international law problems. 

In a broad sense, ‘characterisation’ is of the essence of legal reasoning. In order to apply the doctrine of stare decisis, a court must determine whether one case is like another. Characterisation thus involves comparison and taxonomy. It involves an understanding of the facts, the sources of law on which the issues arise, and the exercise of characterisation itself. Characterisation is important because it is how courts fashion the premises for legal argument. In hard cases, courts may legitimately adopt any one of multiple competing characterisations. As Edelman J recognised in a related context in Australian Competition and Consumer Commission v Valve Corporation [No 3], ‘different factors will often point in different directions’. The ambiguity is resolved through the application of value judgments, which might be disguised, hidden or suppressed. The same observations may be directed to the characterisation exercise in private international law, where the claim (in the case of certain jurisdictional rules) or the issue (in the case of choice-of-law rules) must be characterised to determine the proper approach to a cross-border problem. 

The thesis of this article is that certain kinds of breach of confidence may be characterised as torts, at least for the purposes of Australian private international law. This follows the suggestion by the authors of Dicey, Morris and Collins on the Conflict of Laws. It is argued that, when a putative breach of confidence involves a misuse of private information in cross-border circumstances, it may be characterised as tortious for the purposes of rules of jurisdiction and choice of law. A tortious characterisation would serve the ends of certainty and comity which are fundamental to common law choice-of-law techniques. It would also serve the policy considerations which have underpinned the development of the substantive principles concerning misuse of private information. It is argued that this approach is consistent with appellate authority recognising the unique character of equitable jurisdiction. 

The article begins by identifying characterisation in private international law. It then considers debates concerning the juridical basis of breach of confidence and its metamorphosis in some common law jurisdictions into the tort of misuse of private information. The very existence of that debate indicates that breach of confidence may intelligibly have more than one character. The substantive principles of breach of confidence inform the way that cross-border problems ought to be resolved in private international law. The remainder of the article considers characterisation in respect of long-arm jurisdictional rules, and then in respect of choice-of-law rules.

'Varieties of Damages for Breach of Privacy' by Jason N E Varuhas in Varuhas and Nicole Moreham (eds), Remedies for Breach of Privacy (Hart, 2018) comments

This paper offers a comprehensive account of the law of damages within the action for misuse of private information in English law. The paper interrogates which types of damages are and ought to be available for breach of privacy, and the legal rules and principles governing each form of damages including the approach to quantification. In examining the law of damages the paper considers the nature of the emergent privacy action, arguing that it has shed its equitable origins in breach of confidence and now closely resembles 'vindicatory' actions such as false imprisonment, battery and trespass to land. In turn the remedial approach for breach of privacy increasingly follows that adopted within these torts. 

The paper first considers compensatory damages, arguing that a 'vindicatory' model ought to characterise the approach to compensatory damages, and is the prevailing approach in English law following the High Court and Court of Appeal's important decisions in Gulati v MGN Ltd. According to this approach, damages are available for the wrongful invasion of privacy in itself, irrespective of the suffering of material loss. In addition consequential losses are recoverable, including distress, recognised psychiatric illness and financial loss. Damages are available as of right and are not to be analogised with awards of 'just satisfaction' made by the European Court of Human Rights. 

The paper then examines non-compensatory damages. The courts are yet to authoritatively determine the availability of such damages for breach of privacy, and the principles governing their award. The paper argues that exemplary damages ought to be available, but quantum should not be so high as to constitute disproportionate interference with free expression. An account of profits should not be available. But if such remedy were to be recognised it ought to be awarded only exceptionally and the criteria for granting an account should follow the normative concerns that underpin the privacy action. Reasonable fee or user damages are one means of measuring loss in property torts; they are not restitutionary. They ought not to be available for breach of privacy as it would be inapt to treat dignitary interests as if they were interests in tradeable commodities. The novel head of 'vindicatory' damages, recognised in a series of Privy Council appeals, should not be available as they would add nothing to existing remedies. 

Lastly, the paper considers damages in lieu of an injunction, arguing that these damages compensate for the loss of a legal liberty to enforce primary rights; they are not restitutionary. Such damages ought very rarely to be awarded in the place of an injunction in a case of ongoing, unjustified invasion of privacy.

Discrimination

The report, by the Senate Standing Committee on Legal and Constitutional Affairs, on Legislative exemptions that allow faith-based educational institutions to discriminate against students, teachers and staff, features the following recommendations

R 1 The committee recommends that the government reject recommendations 5 and 7 of the Religious Freedom Review, which permit faith‑based educational institutions to single out certain groups for discrimination on the basis of sexual orientation, gender identity or relationship status, in particular circumstances. 

R 2 The committee recommends that the government immediately release to the public the full report and findings of the Religious Freedom Review. 

R 3 The committee recommends the Australian Government amend section 37 and remove subsection 38(3) of the Sex Discrimination Act 1984, and amend any other relevant legislative provisions, to prohibit discrimination against students on the grounds of the protected attributes in the Act. 

R 4 The committee recommends that further consideration be given to amending the Sex Discrimination Act 1984, and any other relevant legislation, to prohibit discrimination by faith‑based educational institutions against teachers and staff on the grounds of the protected attributes in the Act. In so doing, consideration should be given to the relevant provisions of the Anti‑Discrimination Act 1998 (Tas) discussed in this report. 

R 5 The committee recommends that consideration be given to inserting in law a positive affirmation and protection of religious freedom in Australia that is appropriately balanced with other rights.

Sentencing

The NSW Sentencing Council has been asked to review the sentencing for the offences of murder and manslaughter under ss 19A, 19B and 24 of the Crimes Act 1900 (NSW).

In particular the Council will advise on the standard non-parole periods for murder and whether they should be increased; and the sentences imposed for domestic and family violence related homicides.

The Council's Terms of Reference for the iquiry are -

In undertaking this review, the Sentencing Council should consider:

• Sentences imposed for homicides and how these sentencing decisions compare with sentencing decisions in other Australian states and territories; 

• The impact of sentencing decisions on the family members of homicide victims; 

• The devastating impact of domestic and family violence on our community; 

• The application of section 61 of the Crimes (Sentencing Procedure) Act 1999 in the context of life sentences imposed for murder; 

• The principles that courts apply when sentencing for these offences, including the sentencing principles applied in cases involving domestic and family violence; and  

• Any other matter the Council considers relevant.

3D Printing and Intellectual Property

3D Printing and Intellectual Property Futures by Thomas Birtchnell, Angela Daly, Thierry Rayna and Ludmila Striukova for the UK Intellectual Property Office comments 

This report contains socio-legal research conducted on the relationship between 3D printing and intellectual property (IP) at the current point in time and in potential future scenarios, through the use of horizon-scanning methods in six countries—China, France, India, Russia, Singapore and the UK - to build a rich picture of this issue, comprising both developed and emerging economies. 

In conducting this research, we take up the baton from previous UK Intellectual Property Office (IPO) reports on 3D printing and IP (Mendis, Secchi and Reeves 2015). As noted in these previous reports, there is very little empirical research on how the relationship between 3D printing and IP is playing out in practice. In addition, there is very little existing literature or research on 3D printing’s trajectory outside of developed Western economies, and how it is interacting with IP in the rest of the world. Our research goes some way to filling this gap, presenting novel insights on developments in Russia and Asia. Furthermore, as the UK reassesses its place in the world post-‘Brexit’ there is a need for greater awareness about future trade partners outside of the European Union (EU) such as the countries we examine. In our project, we have collected valuable information ‘from the ground’ on the past and present of 3D printing and IP in these different countries. Another novelty of our project is the futures projections we led in each place, in order to understand potential trajectories going forward for 3D printing and IP, and to understand the extent to which a harmonised or fragmented global picture can be constructed. Our interdisciplinary, international team, combining legal, business and social scientific regional expertise on 3D printing, has used cutting edge and novel empirical methods in order to pioneer a deeper probing of the ramifications of 3D printing, going further than prior commentary through methodological innovation and an international focus on 3D printing and IP. 

While we have created new research filling - to some extent - the gap on 3D printing and IP outside of Western countries, we also acknowledge one of the limitations of our work. The case of BRICS countries may not be representative of all developments in 3D printing and IP outside of Western countries. Indeed, the use of 3D printing is growing in the Middle East and Africa, but due to limitations of scope we were not able to conduct research in these locations. However, in order to build up a fuller picture of 3D printing’s implementation globally, and the effect this may have on IP, more research is required in locations outside of the North/West.

This Report is structured in three parts: in Part I we present a summary of illustrative existing literature on 3D printing and IP; in Part II we present our empirical research on 3D printing and IP, including potential future scenarios; and in Part III we finish by outlining our findings, recommendations and conclusions drawn from both parts of our research. 

Part I Existing 3D Printing and IP Literature 

There is a blossoming body of literature from the business, legal and social sciences disciplines examining various aspects of 3D printing and/or IP. In the business and social science literature, topics including adoption, industrial applications, prosumerism, IP and future forecasting feature. The legal literature review covers each IP right in turn, proposals for new sui generis rights, enforcement, how different industries have engaged with 3D printing and IP issues, and potential future scenarios. 

Much of this existing scholarship comes from and focuses on 3D printing and IP in the Global North/West, with limited material on emerging economies and the Global South. Furthermore, the IP literature mainly concerns copyright and patents, with literature on other IP rights less developed. 

Part II Empirical 3D Printing and IP Research 

In this project we have aimed to get away from the idea that futures—including for IP—are dependent on, or determined by, technologies or that they are simply derived from the ways in which the present is unfolding (Birtchnell and Urry 2016). In our empirical research we have aimed to better understand the potential future direction(s) of 3D printing technologies and what impact this may have for IP. 

In order to understand more fully the development of 3D printing in different locations, especially in emerging and non-Western economies, its relationship with IP law and practice, and how this relationship may change in the future, we conducted qualitative focus-group style horizon scanning workshops with experts from the 3D printing ecosystem during 2017 and 2018 in six locations: Moscow (Russia), Roorkee (India), Singapore, Shenzhen (China), Paris (France) and London (UK). The workshops comprised between five and fifteen experts in each location who were selected because of their experience in 3D printing and associated industries and/or IP law and practice. Our aim was to get participants comprising a cross-section of different actors in the 3D printing/IP ecosystem, including across a range of industries. 

The horizon scanning format for the workshop was developed by the project team and comprised three parts: the Multi-Level Perspective (MLP) to establish past and present trends and a combination of Ideal Futures scenario constructing and backcasting to scan the horizon. The benefit of the fusion of these methodologies is a multi-dimensional appraisal of foreseeable trends across different countries at different scales. 

Part III Recommendations and Conclusion 

Our main findings from the horizon scanning workshops comprise the following: 

Commonalities across the countries 

1. There are a number of similarities across the countries, in particular government policies to stimulate the creation and take-up of new technologies including 3D printing. 

2. 3D printing does not appear to be posing fundamental threats to IP in any of the countries examined at this moment in time. 

3. IP is far from the only area of law involved with 3D printing, and may not be the most important legal concern for those operating in the 3D printing industry. Medical device regulation, product liability, and health and safety laws may be more important legal considerations for industry actors. 

4. But IP is also not unimportant for 3D printing as can be seen from patenting activities, the expiry of patents leading to greater technology dissemination and the possibility of more IP litigation. 

5. The relationship between 3D printing and other emerging technologies such as automation, Internet of Things (IoT), artificial intelligence and blockchain is one of cross-fertilisation. 

Country-specific issues 

6. In Singapore, an ageing population is influencing government policy, and in turn influencing the implementation of 3D printing in medicine through government investment in this area. 

7. Political and cultural trends especially in the UK and France seems to be leading to renewed interest in re-invigorating manufacturing within the nation-state and 3D printing is imagined as a technology which can fulfil these promises by achieving onshoring— but it is far from clear that this is realistic given competition from Asian and other Western economies. 

8. The projected future outlooks for 3D printing and IP vary quite significantly among the countries examined: the Asian countries and Russia are broadly aligned with a capitalist future outlook, which would likely preserve ‘conventional’ IP laws and practices. The future outlook for the UK and France diverges from this picture by opening more possibilities for commons-based scenarios which may challenges conventional IP. 

9. India remains a possible site for a future large manufacturing paradigm change given pre-existing conditions and significant potential for 3D printing in there. India could be the site of pioneering localised and distributed manufacturing, a model which may be adopted elsewhere especially in other parts of the Global South. 

Our Recommendations 

1. Developments should continue to be monitored, especially:

• the extent to which 3D printing is successful in reinvigorating national manufacturing agendas; 

• the practical opportunities 3D printing offers for localised manufacturing in contrast to the current situation of a ‘World Factory’, containerisation and cyclic consumerism; 

• cultural and political trends; 

• country-to-country and sector-to-sector differences

2. The rise of China, and the potential rise of India into the ranks of developed economies with large middle classes exhibiting a strong showing in innovation, including in 3D printing, should be monitored. 

3. We did not find a pressing need for legal reform from representatives of the industries participating in the horizon scanning workshops, including the creative industries, medicine, law, industrial manufacturing and research. Nevertheless, we recommend legal clarification of existing theoretical IP issues exposed by 3D printing. These issues include the subsistence of IP rights, identifying activities which constitute infringement especially secondary infringement and how some exceptions to infringement operate. The limited litigation so far on 3D printing internationally has not been on these topics and accordingly has not provided this clarification. 

4. The UK should continue to keep track of any next steps in the EU arising from the European Parliament’s Resolution on 3D Printing, and consider aligning any revisions of its own laws with the outcome of this process where this meets domestic objectives. 

5. Companies should not be left alone to the task of business model innovation when faced with new forms of digitised technologies such as 3D printing. Instead, Government should work with industry to create transition ‘champions’ who would help companies understand the arising technological, economic, social and legal issues and rethink their business model to achieve long term competitiveness. Since such issues are only going to become prevalent as 3D printing technologies advance and becomes increasingly adopted, this may well become a critical aspect of industrial policy.

Income, Information and Privacy

'The Salary Taboo: Privacy Norms and the Diffusion of Information' by Zoe Cullen and Ricardo Perez-Truglia comments 

The diffusion of salary information has important implications for labor markets, such as for wage discrimination policies and collective bargaining. Despite the widespread view that transmission of salary information is imperfect and unequal, there is little direct evidence on the magnitude and sources of these frictions. We conduct a field experiment with 752 employees at a multi billion-dollar corporation to address these questions. We provide evidence of significant frictions in how employees search for and share salary information and suggestive evidence that these frictions are due to privacy norms. We do not find any significant differences in information frictions between female and male employees.

The authors argue

Most employers provide limited information about salaries. Thus, employees’ knowledge about salaries depends largely on their ability to communicate with each other. However, there is a widespread belief that the diffusion of salary information is imperfect and unequal. For example, most employees do not discuss salaries with their coworkers, despite wanting to be better informed about peers’ salaries (Glassdoor, 2016; PayScale, 2018). These information frictions are sometimes attributed to firm efforts that discourage employees from discussing salaries (Gely and Bierman, 2003; Hegewisch et al., 2011). Others argue that the frictions stem from a “salary taboo”: a social norm around salary privacy that discourages coworkers from revealing or inquiring about salary information (Trachtman, 1999; Edwards, 2005). 

These information frictions are important, because they have implications for a broad range of labor market phenomena. For example, information frictions can facilitate workplace discrimination, increase employers’ market power (Danziger and Katz, 1997; Cullen and Pakzad-Hurson, 2017), and hinder collective bargaining and unionization (Corbett, 2002). These supposed information frictions also have inspired several policies, such as those that punish employers when they retaliate against employees who discuss wages with each other (Pender, 2017; Siniscalco et al., 2017). Despite these important implications, there is little direct evidence on the diffusion of salary information. We use a field experiment to provide novel evidence on how individuals search for and share salary information and on the role that privacy concerns play in these decisions. 

Employees can benefit from information about coworkers’ salaries in several scenarios, such as negotiating salary, switching managers, or searching for new jobs. This information has a cost, though: employees must spend time and energy to search for it, and they may face costs for inquiring about sensitive data. We design a novel field experiment to study these costs and benefits. 

To measure employees’ willingness to search for information, we generate an exogenous shock to the benefits of being informed about salaries by allowing employees to partake in a game. In the game, employees guess the average salary of a random sample of five of their peers (e.g., a bank teller guesses the average salary of five other tellers from the same branch). Employees whose guesses fall within 5% of the true average salary receive a monetary reward. After providing their initial guesses, which they must do immediately, respondents are offered the opportunity to acquire an extra week to search for information in the wild and improve their guesses. We elicit the probability of winning the game with and without the additional week, using self-reported and incentive-compatible methods. The degree to which employees expect the extra week to increase their probability of winning the game measures their willingness to search for information in the wild. 

We measure the gross benefits from information by eliciting the willingness to pay for an imperfect but informative signal about the average peer salary, using an incentive-compatible method. In other words, we provide subjects with the opportunity to acquire readily available information from the experimenter instead of searching for information in the wild. Last, we measure the willingness to share information with others. We offer respondents an opportunity to reveal their own salaries to five peers, and we use an incentive-compatible method to elicit the willingness to pay to reveal this information (for subjects who prefer to share the information) or the willingness to pay to conceal this information (for subjects who prefer to conceal the information). 

We cross-randomize two key features of the survey. The first treatment arm allows us to test differences in the diffusion of salary information, relative to other important career information. For this, we randomize subjects into two versions of the survey: salary and seniority. The survey types are identical, except that one asks about the average seniority of peers instead of the average salary. Just like information about peer salary, information about peer seniority can be useful to make important career choices, such as whether to ask for a promotion or search for another job. However, employees may face higher frictions when searching for and sharing information about salary, compared to seniority, for example, because of the salary taboo. 

The second treatment arm aims to test the rational inattention hypothesis, according to which individuals search for and acquire new information when they stand to gain from it (Woodford, 2001; Sims, 2003; Mankiw and Reis, 2002; Reis, 2006). We randomize the size of the rewards of the guessing game using five different values from $13 to $63 (these and all other monetary values reported in this paper are expressed in United States dollars using PPP-adjusted exchange rates from February 2018). This randomization generates exogenous variation in the benefits of being informed. We test two predictions of the rational inattention model: higher rewards should increase the willingness to search for information in the wild and the willingness to acquire readily available information. 

We conduct a field experiment with a sample of 752 employees from a large commercial bank (hereafter referred to as the firm) with thousands of employees, millions of customers, and billions of dollars in revenues. The firm is typical in some relevant respects. The firm does not have open salary policies and discourages employees from discussing salaries with each other. Most employees report that they have limited information about salaries and would prefer the firm to be more transparent. There seems to be a social norm against asking coworkers about their salaries, and employees rarely discuss salaries with their coworkers. A number of studies show that these features are common in firms from several countries, including the United States (Trachtman, 1999; Edwards, 2005; Hegewisch et al., 2011; Glassdoor, 2016; PayScale, 2018). 

We find that employees have imperfect information about the salaries of their peers: the mean absolute error of the guesses reported in the game is 16%. Indeed, this level of misperception is what we would expect if employees have access only to information about their own salaries. Although employees are overconfident in their guesses, they are aware that their accuracy (i.e., the probability of guessing within 5% of the truth) is far from perfect. 

We provide evidence that misperceptions are partly due to search costs. When presented with financial incentives to do so, most individuals are willing to search for information in the wild. When given an extra week to gather information, the average respondent expects to increase the probability of winning the guessing game by 23 percentage points. The evidence reveals that search costs are unequal: when provided with the additional week, some employees expect to search for information in the wild, but other employees do not expect to search. And consistent with the rational inattention hypotheses, employees who are randomly assigned to higher game rewards expect to search more intensively than employees who are assigned to lower game rewards. 

We find that, much like the search costs, the gross benefits of the salary information are significant and unevenly distributed. The median willingness to pay for the readily available signal of peer salary is about $13. Consistent with rational inattention, this value is higher for individuals who are assigned to a higher game reward and thus stand to gain more from the information. Employees in the bottom half of the distribution, who are willing to pay less than $13 for the information, seem to be misinformed mainly due to a lack of interest. On the other hand, the remaining half of subjects highly value the information: their willingness to pay for the signal has a median of $130 and a mean of $369. These high valuations suggest that these employees do not search for information in the wild because of information frictions. 

We find that individuals also face significant frictions when sharing information with others. The willingness to reveal one’s salary to coworkers is both significant and heterogeneous. Whereas a minority of employees (20%) prefer to share personal salary information with their peers, most (80%) prefer to conceal this information. Moreover, this preference for privacy can be strong: some employees would reveal their salaries for a small sum of money, but roughly half would not be persuaded to reveal the information to five peers even for $125. 

The preference for privacy is consistent with a salary taboo. Individuals are afraid to ask coworkers about their salaries, because they understand that most coworkers prefer to keep their salary information private. Indeed, this interpretation is consistent with our subjective data. Most respondents report that it is socially unacceptable to ask coworkers about their salaries and that they feel uncomfortable doing so. Moreover, 89% of respondents believe that if they ask coworkers about their salaries, they will get asked about their own salaries. Thus, employees may be afraid to ask coworkers about their salaries because that may force them to reveal their own salaries, which they dislike. 

We find that employees are better informed about peer seniority than about peer salaries. When guessing salaries, employees are as accurate as they would be if they just reported their own salaries. This finding indicates that employees do not have access to information beyond their own salaries. In contrast, when guessing seniority, employees are substantially more accurate than they would be if they just reported their own seniority. This finding suggests that employees have access to other information about seniority besides their own seniority. Moreover, our evidence suggests that, at the margin, employees stand to gain more from salary information than from seniority information. This evidence suggests that the difference between salary misperceptions and seniority misperceptions are due to differences in search costs. 

Although it is not the only possible interpretation, the demand for privacy is our favorite interpretation for the differences between salary misperceptions and seniority misperceptions. Two main pieces of evidence support this view. First, the revealed-preference evidence indicates that the topic of salary is substantially more sensitive than that of seniority. The average employee is willing to reveal personal salary information to a sample of five peers for $67 and willing to reveal seniority to peers for just $28. Second, the subjective data also suggest that salary is a more sensitive topic. Whereas 69% of employees find it unacceptable to ask a coworker about salary, only 6% find it unacceptable to ask about seniority; and whereas 53% of employees find it uncomfortable to ask about a coworker’s salary, only 5% find it uncomfortable to ask about seniority. 

We find substantial frictions in information diffusion, even though participation in the game may facilitate this diffusion. For example, the guessing game may provide an excuse to ask peers about their salaries that mitigates the fears of breaking a social norm or breaking the company’s disclosure rules. Thus, if anything, our findings may underestimate the magnitude of information frictions under normal circumstances. 

Our last result relates to gender differences in information frictions. This analysis is motivated by the widespread view that pay secrecy disproportionately affects women (Babcock and Laschever, 2009) and thus may be one of the factors behind the gender pay gap. Consistent with this view, survey data indicate that women are less confident than men about their salary knowledge (Glassdoor, 2016; Cullen and Pakzad-Hurson, 2017). Consistent with these prior survey findings, our own data indicate that female employees are less confident than male employees about their ability to guess the salaries of their peers. However, we find that those differences in confidence do not correspond with any real differences in accuracy. If anything, female employees are slightly more accurate than their male counterparts. Moreover, we find that other gender differences are small, statistically insignificant, and precisely estimated: female and male employees are equally willing to search for information, equally willing to buy information, and equally willing to share information with peers. 

Our study relates to various strands of literature. A large theoretical literature from economics and management suggests that frictions in the diffusion of salary information can have important implications for labor markets (Akerlof and Yellen, 1990; Kuhn and Gu, 1998, 1999; Ellingsen and Rosén, 2003; Michelacci and Suarez, 2006; Cullen and PakzadHurson, 2017; Moellers, Normann, and Snyder, 2017). Yet, there is little direct evidence on the magnitude and sources of information frictions. This study builds on our previous work documenting significant misperceptions of peer and manager salaries (Cullen and PerezTruglia, 2018).6 This study aims to understand the sources of these misperceptions, with special emphasis on the role of the salary taboo. 

Our study relates to a literature on the diffusion of information in social networks. Several models explain how individuals form beliefs based on peer-to-peer communication (Bass, 1969; Ellison and Fudenberg, 1995). More recent studies measure social learning in the field (Mobius and Rosenblat, 2014). Some of these studies artificially create incentives for information diffusion. For instance, Mobius et al. (2015) recruited college students to play a “treasure hunt” game in which they earned prizes by collecting information from peers. Other studies exploit natural incentives for information diffusion. For example, Beaman et al. (2018) seeded useful information about composting and measured its diffusion in an agricultural network. These papers show evidence that, even in settings where information is mutually beneficial, its diffusion is highly imperfect. Our contribution to this literature is twofold. First, we contribute a new method to measure the willingness to search for information and the willingness to share information with others. Second, we explore the role of privacy norms for the diffusion of information. 

Our paper adds to the literature on the economics of privacy (Acquisti et al., 2016). For example, Goldfarb and Tucker (2012) show that, even in anonymous internet surveys, some respondents refuse to reveal information about their incomes and demographics. Athey et al. (2017) and Adjerid et al. (2013) study the demand for privacy in the crypto-currency market. They show that even individuals who report that they highly value privacy are willing to give away sensitive information for small incentives. We contribute to this literature by measuring preferences for privacy in a context with high stakes (i.e., an employee’s willingness to reveal personal salary information to coworkers). In contrast to those other contexts, we find a high willingness to pay for privacy. Perhaps more surprisingly, we find a large heterogeneity in preferences for privacy, with some individuals willing to pay to reveal their salary to peers rather than conceal it. 

Last, this study relates to literature on wage discrimination. There is a widespread view that pay secrecy hurts minorities, because it helps employers to discriminate against them (Phillips, 2009; Colella et al., 2007). This view has led to various efforts to reduce the gender wage gap, through transparency policies (Colella et al., 2007). However, this argument often assumes that pay secrecy hinders information access more for women and minorities than for others. Our evidence does not support this assumption: women and men face similar frictions and have similar degrees of misperceptions. However, we do find that female employees are less confident than male employees about the accuracy of their beliefs. 

The rest of the paper proceeds as follows. Section 2 presents the conceptual framework. Section 3 presents the survey design. Section 4 discusses the implementation details. Section 5 presents the results. The last section concludes

UK Media Regulation

Echoes of Australia's Finckelstein report in the LSE Commission on Truth Trust And Technology report Tackling The Information Crisis: A Policy Framework for Media Systems Resilience.

The Commission comments

Changes in the UK media system have resulted in an information crisis, with a growing number of leaders in health, defence and politics concerned about system resilience and the new difficulty of achieving informed debate. This report argues that the information crisis is manifested in ‘five giant evils’ among the UK public – confusion, cynicism, fragmentation, irresponsibility and apathy.  

While the media, platforms and public authorities are responding, there are challenges of coordination, a lack of research and information in policy-making, and the potential for conflicts of interest and disputes over media freedom, which are hindering necessary reforms.  

Policy-makers and the public are in the dark: the extent of the problem and whether current policy is addressing it are not clearly understood, and the problems created by a complex media system are ongoing.  

This report recommends actions aimed at addressing systemic problems and at creating conditions that will help to sustain democratic processes of deliberation and consensus building in the UK. Whether our longer-term recommendations will need to be implemented will depend on progress in the short term.  

Immediate Actions  

Establish an Independent Platform Agency  

The UK and devolved governments should introduce a new levy on UK online platforms’ revenue, a proportion of which should be ring-fenced to fund a new Independent Platform Agency (IPA). The IPA should be structurally independent of Government but report to Parliament. Its purpose, initially, will not be direct regulation, but rather an ‘observatory and policy advice’ function that will establish a permanent institutional presence to encourage the various initiatives attempting to address problems of information reliability.  

The IPA should be established by legislation and have the following duties:

• Report on trends in news and information sharing according to a methodological framework subject to public consultation. This should include real data on the most shared and read stories, broken down by demographic group.
• Report on the effectiveness of self-regulation of the largest news-carrying social and search platforms. This should include reports on trust marks, credibility signalling, filtering and takedown.
• Mobilise and coordinate all relevant actors to ensure an inclusive and sustained programme in media literacy for both children and adults, and conduct evaluations of initiatives. The IPA should work with Ofcom to ensure sufficient evidence on the public’s critical news and information literacy.
• Report annually to Parliament on the performance of platforms’ self-regulation and the longterm needs for possible regulatory action.
• Provide reports on request to other agencies such as the Electoral Commission, Ofcom and the Information Commissioner’s Office, to support the performance of their duties, according to agreed criteria.
• Work closely with Ofcom and the Competition and Markets Authority to monitor the level of market dominance and the impact of platforms on media plurality and quality.

In order to fulfil these duties, the IPA will need the following powers:

• Powers to request data from all the major platforms (determined by a UK advertising revenue threshold) on the top most shared news and information stories, referrals, news-sharing trends and case studies of particular stories. The types of data should be determined on the basis of public consultation on monitoring methodologies and according to a shared template that applies across different companies above the threshold. These data will be held by the IPA within a tight confidentiality regime to protect privacy and commercial sensitivities.
• Powers to impose fines on platforms if they fail to provide data, and to request additional data when a court order is granted.
• The IPA’s independence from government should be established in law and protected financially and through security of tenure of its governing Board.

The IPA should have close links with civil society and be transparent about how it interprets and performs its remit.

In addition to this new institution, we make further recommendations:  

In the short-term:

• News media should continue their important work to develop quality and innovative revenue and distribution models. They should also continue to work with civil society and the platforms on signalling the credibility of content.
• Platforms should develop annual plans and transparent open mission statements on how they plan to tackle misinformation. They should work with civil society and news providers to develop trust marking.
• Government should mobilise an urgent, integrated, new programme in media literacy. This could also be funded by the digital platform levy and should include digital media literacy training for politicians.
• Parliament should bring forward legislation to introduce a statutory code on political advertising as recommended by the Information Commissioner.

In the medium-term (3 years):

• Standard setting for social media platforms. Until now, standards have been set by platforms themselves. If this fails to improve the UK information environment, the IPA should set these in collaboration with civil society, Parliament and the public.
• The news industry should develop a News Innovation Centre to support journalism innovation and quality news, funded by the levy on digital platform revenue.

In the longer-term (5 years):

• The IPA should provide a permanent forum for monitoring and review of platform behaviours, reporting to Parliament on an annual basis.
• The IPA should be asked to conduct annual reviews of ‘the state of disinformation’ that should include policy recommendations to a parliamentary committee. These should encompass positive interventions such as the funding of journalism.

Possible long term policy actions:  

In the longer term it might be necessary to subject platforms to much more stringent regulation, including making them liable for content they host, obliging them to unbundle or separate internal divisions, or even breaking up their business units or introducing a more comprehensive system of tax incentives. In time, it is possible that the IPA will develop beyond a ‘monitoring and information’ function into a regulatory function, but it is also possible that regulatory needs can be met by a combination of existing bodies, as advised by the IPA.  

The recommendations in this report are aimed at ensuring that the interests of citizens – understood as all of those residing in the UK – are protected alongside the interests of other stakeholders as the media system develops. This is essential if the information crisis is to be tackled successfully and democratic deliberation sustained.

FTAs and Export Controls

'How Trade Deals Extend the Frontiers of International Patent Law' (CIGI Papers No. 199 — November 2018) by Jean-Frédéric Morin and Dimitri Thériault for the Centre for International Governance Innovation comments 

Bilateral and regional trade deals frequently include patent provisions that go beyond the minimum requirement of the multilateral Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). They extend the scope of patentability and provide additional rights to patent holders. This paper systematically maps these “TRIPS-plus” agreements. Exploiting a new data set, 52 TRIPS-plus agreements are found to have been concluded between 1990 and 2017. The major proponents of these TRIPS-plus agreements on patents are the United States, followed by the European Union and the European Free Trade Association. Other technology-rich countries, such as Japan and Korea, have surprisingly few TRIPSplus provisions on patent protection in their trade agreements. Few South-South trade agreements include TRIPS-plus provisions, but some include TRIPS-extra provisions on genetic resources and traditional knowledge. Having a clear picture of these TRIPS-plus agreements is essential as they can have important social and economic consequences, including for the development of innovations and access to technologies.

The authors note

This paper is one of the first attempts to systematically map key patent provisions in bilateral and regional preferential trade agreements (PTAs). Some of these provisions have important policy implications, including for the development of innovations and access to technologies. This paper shows their historical evolution and their geographical distribution. 

The available literature has already reported that some PTAs offer a level of patent protection that goes beyond the minimum requirements of TRIPS. However, several questions still need more research and analysis. In particular, the number and scope of TRIPS-plus agreements are uncertain. It is also unclear if their conclusion is more frequent today than it was a decade ago. As well, the practices of several countries remain undocumented, beyond some well-known advocates and opponents of TRIPS-plus agreements. 

This paper fills these gaps by relying on a recent data set of TRIPS-plus agreements (the T+TPA data set) introduced by Jean-Frédéric Morin and Jenny Surbeck. This data set is based on an exhaustive collection of more than 600 PTAs concluded between 1947 and 2017. Among these PTAs, Morin and Surbeck identified 52 PTAs with significant TRIPS-plus provisions on patents. 

The rest of this paper is divided into seven short sections. The first section describes the current state of multilateral negotiations over patent law. The second section describes eight categories of TRIPS-plus provisions on patents, while the third section presents their development over time. The next section identifies the key role played by the United States and by European countries in promoting TRIPS-plus agreements. The fifth section assesses the PTAs involving other technology-rich countries. The sixth section considers developing countries and their role in the diffusion of TRIPSplus provisions on patents. The last section focuses on provisions that are of particular interest for developing countries. The conclusion identifies directions for future policy-oriented research.

They conclude

The proliferation of TRIPS-plus and TRIPS-extra provisions in PTAs requires further research. At least three main areas of research would have clear added value for policy making. The first involves exploring the domestic consequences of TRIPS-plus provisions on patent protection. As yet, it is unclear how far these commitments reflect pre-existing legal standards or whether they require domestic reforms. In the latter case, it would be interesting to study if and how the reforms are being implemented. Developing countries that are compelled to implement TRIPS-plus obligations might take advantage of these legal reforms to include new exceptions and exclusions in their domestic legislation. Case studies might also be useful for investigating the social and economic consequences of implementing TRIPS-plus provisions. 

A second stream of research concerns the global and strategic consequences of TRIPS-plus provisions. These consequences would include processes such as regulatory competition across countries with different standards, norm diffusion driven by the desire to level the playing field and the reverberation from bilateral initiative to multilateral negotiations. The existing literature also tends to portray developed and developing countries as antagonistic actors in international patent law making. It is time to debunk this apparent oversimplification. The pro-patent posture of some developing countries, the nuanced policy of some high-income countries and the rise of emerging countries raise new questions that should be explored. 

A third avenue for future research concerns the potential alternative to existing TRIPS-plus provisions on patents. The current debate on international patent protection has focused on the flexibilities already provided in the TRIPS Agreement and on TRIPS-plus provisions. However, the example of TRIPS-extra provisions on TK and GRs shows that trade negotiators have the capacity to be creative and think outside the TRIPS box. Nothing precludes trade negotiators from addressing issues such as licensing pools, open science and scientific collaboration in their future PTAs. Provisions on these issues might actually do more for technological innovation than TRIPS-plus provisions on patents.

'Strategic Export Controls: A Case Study of Regulation of Executive Power and Parliamentary Accountability in the United Kingdom' by John F McEldowney in Daniel Joyner (ed), Non-Proliferation Export Controls Origins, Challenges, and Proposals for Strengthening (Routledge, 2006) comments 

Export controls received concentrated media attention during the Arms to Iraq saga played out in all its detail before the Scott Inquiry in 1996. The inquiry revealed a complex and detailed regulatory structure overseeing exports that lacked transparency, was of dubious legality and was subject to only weak parliamentary accountability. The focus of this chapter is on the command and control system of regulation over export control within the United Kingdom post the Scott Inquiry and the enactment of the Export Control Act 2002 which came into force on 1 May 2004. In the last annual Report on Strategic Export Controls (United Kingdom 2005; see also Taylor 2003), it was estimated for the year ended 2003, the value of exports of strategically controlled goods was £992.4 million. These exports make a significant contribution to the defence and security of the United Kingdom, as well as contributing to the multi-various international obligations to be met by the armed forces. In considering the regulation of strategic exports, an historical approach is adopted in drawing out the tensions between executive discretion and parliamentary controls. The main question addressed is how accountable is the new regulatory system? The main thesis advanced is that the system of export control is linked to the policy of the government of the day. In its early legal construct, it reflected the legal culture of the UK. Formally legalistic and highly structured in form, the actualité is of a pragmatic system that also reflects many of the strengths and weaknesses of a parliamentary system of ad hoc accountability. Thus the system of control is strongly driven by the government of the day, sustainable through political oversight and pragmatic decision-making subject to market forces. Party political decisionmaking is often interspersed with balancing different shades of multi-nationalism, especially in terms of the influences of the United States and Europe.