Entertainment Cartels Rule. Everywhere.
p2pnet news view Freedom | P2P:- America isn’t becoming a police state. It’s turning into a massive entertainment division run by a handful of corporate dinosaurs fronted by groups of corrupt executive politicians.
With the members of the Big 4 organised music gang, Vivendi Universal (France), Sony BMG (Japan and Germany), EMI (Britain), and Warner Music (US, but run by a Canadian) leading the way, and Hollywood in the shape of Time Warner, Viacom, Fox, Sony, NBC Universal and Disney close behind, the cartels have promoted a purely commercial matter, of interest only to legacy holders, into a major crime of international proportions.
They claim every time someone shares a file with someone else, a sale is lost, and that amounts to a crime of exactly the same nature as someone walking into a retail outlet and shoplifting a CD or DVD.
However, with sharing, no money changes hands, no one is deprived of something he or she used to own and a number of in-depth academic studies such as Felix Oberholtzer and Koleman Strumpf’s milestone Effect of File Sharing on Record Sales: An Empirical Analysis show filesharing has zero impact on corporate bottom lines.
In may also, in in fact, represent a priceless form of viral marketing.
That being so, why do the labels and movie studios, primarily, insist on this ludicrous practice of suing their own customers — the very people who keep them fat and happy?
Its simple. The sue ‘em all campaign, launched by Vivendi Universal, EMI, Warner Music and Sony BMG’s RIAA (Recording Industry Association of America) in 2003 and adopted by Hollywood (with the software industry in the wings), was never about file sharing.
It’s about gaining complete and total control of how, where, and by whom ‘product’ is distributed and managed online.
And that’s all.
DNA samples and fingerprints
For years the entertainment industry has been using law enforcement agencies in North America and elsewhere as unpaid, taxpayer funded corporate copyright cops and in the UK, they even managed to get an official Metropolitan Police copyright unit formed, effectively switching scarce police resources away from matters of genuine public interest to corporate commercial concerns.
In the most recent UK travesty, “This May, five men and one woman were arrested for sharing music on OiNK,” says TorrentFreak, going on, “The suspects were taken in for questioning, and required to provide DNA samples and fingerprints.
DNA samples? And fingerprints? For allegedly sharing a few music files?
“Two months later, two of the six alleged uploaders were released from further investigation, but (at least) two of the remaining four have been charged today,” the story goes on. ”The alleged uploaders were charged with copyright infringement for uploading one CD.”
But that’s not all. Now American taxpayers are being told they’ll have to dig into their pockets to pay for another corporate industry entertainment cartel copyright enforcer to be called the Intellectual Property Enforcement Coordinator, p2pnet posted yesterday.
“We are pleased to see this important piece of legislation continue to move through the legislative process,” says Dan Glickman, the man who runs Hollywood front organisation the MPAA (Motion Picture Association of America).
“During a time when America’s economy is struggling, it is encouraging to see Congress take action on a measure that will create jobs and promote American ingenuity,” he says, going on:
“We are encouraged that the Senate Judiciary Committee has ushered this bill out of committee and are hopeful that Congress will adopt the legislation in these final weeks of the legislative session. There are few things more important that Congress can do in its closing weeks than to pass this meaningful legislation that will put more Americans to work and protect our nation’s intellectual property.”
America already boasts a so-called US Intellectual Property Enforcement Representative whose salary comes, of course, not from Hollywood, which virtually created the post, but from US taxpayers.
p2pnet went on »»»
A US Senate panel has, “overwhelmingly approved a bill backed by the recording industry that would give federal prosecutors the power to file civil lawsuits against peer-to-peer users who violate copyright laws,” says CNET News, going on:
“By a 14-4 margin, the Senate Judiciary Committee voted for the Enforcement of Intellectual Property Rights Act, which would create stricter IP laws, as well as increase the ability of the White House and Justice Department to enforce those laws.”
Not only but also, the bill adds five new International IP Enforcement Coordinators, “to act as liaisons to foreign countries with respect to U.S. IP law enforcement,” says the story.
The IPEC, “would direct other agencies in a coordinated strategy to fight counterfeiting and piracy”.
Will ACTA come into this anywhere, do you think?
“If Hollywood could order intellectual property laws for Christmas, what would they look like?” - wondered David Fewer, staff counsel at the University of Ottawa’s Canadian Internet Policy and Public Interest Clinic, in June, noting, “This is pretty close.”
ACTA is short for Anti-Counterfeiting Trade Agreement.
Splashed online by whistleblower site Wikileaks, ACTA was, “shrouded in secrecy until a leaked summary of the agreement appeared on the Internet last month,” sparking, “widespread opposition as Canadians worry about the prospect of a trade deal that could lead to invasive searches of personal computers and increased surveillance of online activities,” blogged Ottawa law professor and Internet advocate Dr Michael Geist, adding, “the Canadian government has been among the most secretive of all ACTA negotiating partners”.
And the bit about acting as liaisons to foreign countries, “with respect to U.S. IP law enforcement,” also has interesting connotations, don’t you think?
“This needs sorting out, once and for all,” said enigmax in TorrentFreak recently, asking, “Is it time to make file-sharing a police issue in future, one for the criminal courts?”
He was talking about Britain, but the same question applies everywhere in the world.
That venal, hard-core businesses, which answer only to their shareholders and to no one else, are allowed to operate quite openly in this manner is disgusting enough, but there’s also a deep irony.
“The major record labels and Hollywood movie studios are traditionally and infamously linked to organized crime, rampant drug use, the use of sex as currency and corruption at all levels and they’re the absolute last entities on earth to be instructing anyone, let alone children, on moral issues, on what’s right and what’s wrong and on truth and fairness,” I said in an item discussing the penetration of the entertainment industry into classrooms, a subject all on its own.
Another brand of corporate control
What got me started today was an email from Jazz, a lady who’s been a regular p2pnet comment poster for several years.
Referring to this newest successful, from the look of it, effort by the cartels to foist another brand of corporate control onto Americans, she suggested I should post something similar to an item I ran last month.
But, I thought to myself, why not simply re-run the first post?
So here’s MPAA, RIAA: the fine art of creative accounting, which kicks off, “What’s the difference between the RIAA, MPAA and BSA? - p2pnet asked rhetorically in November last year, answering, rhetorically: ”There is no difference.”
It continues »»»»»»»»»
”MPAA means Motion Picture Association of America, RIAA is Recording Industry Association of America and BSA is Business Software Alliance.”All three are front organizations owned and maintained by vested entertainment and software interests to give the entirely false illusion that they operate in a fair, free and open market place.”The point of the post was to suggest statistics and claims from any or all of these organizations are often unreliable at best, or completely fabricated at worst.
In August this year, ”A federal judge is handing a Louisiana man a year in prison for pirating thousands of DVDs and CDs in a case highlighting the Motion Picture Association of America’s wildly varying valuation of pirated discs,” says David Kravets in Wired, continuing »»»
In the case of Tanner Hills of Louisiana, according to court records, (.pdf) an MPAA expert concluded that the 3,557 bootleg DVDs seized from the defendant’s Jefferson Parish apartment outside New Orleans was valued at $67,583. That’s $19 a disc for such films as Borat, Bambi, 300 and Premium.
And if you think those numbers are high, consider last year when the MPAA said 200,000 illicit DVDs seized in Australia were worth $83 per movie disc. Some 6,200 pirated discs were also found in Hong Kong that year, and the MPAA affixed value at $20 million, meaning each disc was worth $3,225.80. We’re not kidding.
For Hills, the inflated figures don’t really matter. The two counts (.pdf) of criminal copyright infringement to which he pleaded guilty require an illicit cache of $2,500 or more.
But it matters when the MPAA, the movie studios’ lobbying arm, declared Tuesday that movie piracy costs foreign and domestic producers, distributors, theaters, video stores and pay-per-view operators “$18 billion annually as a result of movie theft.”
In Hollywood, lies and hype rule and not too long ago, “On the Internet front, it has been estimated that as much as two-thirds of Internet bandwidth in this country is consumed by peer-to-peer traffic, with much of that volume attributable to movie theft,” MPAA boss Dan Glickman told a US senate judiciary committee, failing to say where he got the number from.
He also tried to spuriously link copyright infringement with with drug trafficking, stating it’s, ”more lucrative than selling heroin for many criminal gangs”.
The number should have been 15%, not 44%
Another p2pnet story suggesting MPAA stats might be, well, a little questionable, said, “An intriguing new detail has emerged in the growing scandal involving statistics used by Hollywood’s MPAA to pillory American students who are being accused by the entertainment cartels of being primarily responsible for dwindling sales.
”Central is a company called LEK, a ‘consulting boutique’. It supplied a report to the MPAA which then used it to claim, ‘44 percent of MPAA company losses in the U.S. are attributable to college students’.”
However, the number proved to be horribly incorrect, which presumably didn’t surprise Britain’s Industry Trust for Intellectual Property Awareness (ITPA). Almost two years earlier it’d described the same report as ”inaccurate and out of date”.
LEK later admitted the figure should have been 15%, not 44%, and Educause took it even lower, saying 3% would probably be even more accurate.
And it was also revealed Kevin Mayer, a senior Walt Disney executive, ran LEK’s global media and entertainment practice, said Portfolio.
Before he left LEK to join Disney in June 2005, his responsibilities included ”the creation of comprehensive anti-piracy strategies for motion picture studios and trade associations,” according to his bio.
‘Piracy’ is Number One
Cinema Blend’s Stuart Wood picked up on the CANADIANS ARE !@#$^*& THIEVING CAMCORDING MOVIE PIRATES! story.
According the MPAA, “Canada is supposedly responsible for 70% of all world piracy,” he observed, going on, “Yep, your friendly neighborhood Canadian supposedly accounts for 7 out of every 10 pirated movies. Well in a new report by the MPAA, they also claim that New York is responsible for 40% of world piracy. Four out of every ten pirated movies.”
But how, Wood wondered, could you have 110% of anything?
Nor is the art of creative statistics new.
The music, movie and software cartels claim ‘piracy’ is a Number One problem not only for themselves, but for the world as a whole, we said in a 2006 story.
The industries have, ”fabricated a multi-headed monster by turning a simple commercial concept - copyright infringement which in truth, affects only them - into a huge, international conspiracy involving millions of their own innocent customers around the world, and genuine criminal counterfeiters,” we said, continuing »»»
So successful are their continuing dis- and misinformation propaganda campaigns that they’ve been able to use them to dragoon entire governments and police forces into acting as industry enforcers.
However, the cartels are also frequently accused of fabricating statistics upon which they base their claims and according to the Havocscope global index of illicit markets, far from being at the top of the pile, movie and music piracy are way, way down the list, ranking 16th and 20th, respectively.
And even those positions are highly questionable given that in both instances, to reach them, Havocscope relies on statistics tainted more than somewhat by the industries concerned.
The movie industry figures are, for instance, based on, “a study released by the Motion Picture Association of America (MPAA),” bolstered by further stats from the Institute for Policy Innovation which, starting from an MPAA $6.1 billion claim, says the, “total impact of movie piracy in terms of lost jobs and tax revenue costs the US economy $20.5 billion”.
But the latter numbers were also put together with, “some funding from NBC Universal and the MPAA,” says The Washington Post.
And guess where the music statistics come from?
The IFPI (International Federation of the Phonographic Industry), owned by EMI, Warner Music, EMI and Vivendi Unversal, the members of the multi-billion-dollar Big Four Organized Music family who singly and collectively claim they’re being “devastated” by their own customers who are, they scream, ‘criminals’ and ‘thieves’.
Hang on a minute —-Institute for Policy Innovation? That rings a bell. Oh Yes! I described the IPI study cited by the MPAA as “deeply flawed,” suggesting its attempts to qualify music industry claims that files shared equal sales lost were just so much hogwash.
IPI president Tom Giovanetti (right) and I had an interesting discussion on it.
Meanwhile, the post cited above continues »»»
‘Pirated’ web videos come in at #5 in Havocscope list, but even the figures which put them at the number five spot are, to be kind, considerably less than convincing.
“The exact figure of piracy on web video sites is difficult to determine,” Havocscope admits ….
Inflated by 2,000%
Nor are MPAA fabrications confined to statistics centering on alleged losses supposedly due to file sharing.
In 2006 the MPAA embarrassed itself and its owners with a look-how-clever-we-are report, said p2pnet, explaining the Hollywood crime-buster “stamped out” (its words) New Century Media in Los Angeles, calling it an “illegal DVD/CD replicating plant” and seizing “$30 million in illegal stampers and DVDs”.
But owner Jennifer Yu accused the MPAA of slander, saying she was in the duplicating business. And that was it. No connection to ‘pirates’ on land or at sea.
And the MPAA ‘’stamped out” claim notwithstanding, New Century Media was still very much open and doing business.
So how did the cartel pseudo cop unit arrive at its “$30 million in illegal stampers and DVDs” figure, widely quoted as hard fact by the mainstream media?
Easy, said the MPAA.
All they had to do was estimate the value of the DVDs seized during the raid, “as well as the value of DVDs that could be produced using the equipment”.
Jennifer Yu said the $30 million (based on DVDs seized and not any criminal activity) was inflated by 2,000%.
Cabinet-level copyright czar
Back to Kravets’ Wired post, ”Los Angeles officials recently adopted an eviction ordinance for pirates based largely on MPAA numbers. Now Congress, pressed by lobbying by the MPAA and Recording Industry Association of America, is considering creating a Cabinet-level copyright czar and granting the U.S. attorney general the authority, for the first time, to file civil lawsuits for copyright infringement,” he said, adding: ”And in case you’re wondering, the RIAA valued the 2,896 CDs seized from Hills’ apartment at $39,791, or $13.74 a disc. Artists included Tupac, Lil Wayne, Snoop Dog, Jay-Z and R Kelly.
”The RIAA said Tuesday that ‘global theft of sound recordings cost the U.S. economy $12.5 billion in lost revenue and more than 71,000 jobs and $2 billion in wages to U.S. workers.’
”The RIAA floated the numbers and the MPAA touted its numbers when urging Congress to adopt the College Opportunity and Affordability Act of 2007, (747-page .pdf) which requires universities to ‘develop a plan for offering alternatives to illegal downloading or peer-to-peer distribution of intellectual property as well as to plan to explore technology-based deterrents to prevent such illegal activity’.”
The RIAA, huh?
In 2003 it instigated, and took part in, a New York Police Department raid which, RIAA spokeswoman Amy Weiss ”estimated,” resulted in the seizure of ”the equivalent” of 421 CD burners.
How can you have the equivalent of 421 CD burners? - wondered the late Bill Evans.
So he asked Weiss and it turned out the raiders had seized 156, and not 421, burners.
”We stated that the raid was the equivalent of 421 burners, as we need to put these operations in perspective based on burning capacity and output, not the number of physical slots for the discs,” Weiss explained.
”Since they burn 4x burners - it is roughly 4xs the numbers of burners.”
Er, well, um …….
5% ahead of last year’s $1.4 billion
But Hollywood and the labels are being devastated. Aren’t they?
Not really. The impoverished (according to the MPAA) multi-multi-multi-billion-dollar Hollywood movie industry is rolling in dollars, reporting mind-boggling income and record breaking attendances, p2pnet said in June.
”Even though the industry set a record pace with its first $4 billion summer last year, the results are showing signs that 2008 could beat that record,” said MarketWatch, going on:
”Figures from box-office tracker Media By Numbers through June 15 show that the business raked in $1.46 billion in U.S. receipts for the first six weeks of what is considered the summer season, nearly 5% ahead of last year’s $1.4 billion.”
What’s, ”even more remarkable about the 2008 season is that attendance is ahead of last year’s pace,” said the story, adding:
”Often, the industry sees an uptick in revenue due to higher ticket prices but attendance is either flat or down. So far this year, 206.2 million tickets have been sold, compared with 202.8 million at the same time last year, an increase of 1.6%, according to Dergarabedian. The average ticket price is up 20 cents to $7.08.”
But the Big 4 labels are in big trouble! Right?
”[…] our assumption that consumer spending on DVDs in 2008 would decline at an accelerating rate (exacerbated by the far slower than expected rollout of next-gen DVD) now appears incorrect,” said Pali Research’s Rich Greenfield recently.
Consumer spending on DVDs has in fact been, ”surprisingly strong” in the first half of 2008 —- up nearly 2%, he stated unequivocally.
And yet, ”Global sales of recorded music fell by 8% in 2007,” according to figures released in June by Vivendi Universal, EMI, Warner Music and Sony BMG’s International Federation of the Phonographic Industry (IFPI), said The Economist.
They blamed 70% of the decline on “file-sharing” software, the story goes on, pointing out, “Industry groups have sued thousands of users of such software, and have supported legislation to criminalise it.”
In reality, the legislation was bought-and-paid for by the cartels and only one person —- a Minnesota single mother targeted by the RIAA (Recording Industry Association of America) the Big 4’s American enforcer —- has actually appeared in court. And her case will certainly be re-heard.
There are statistics, damned statistics and entertainment cartel statistics.
Now there are real cops —- and the cartels.
Jon Newton - p2pnet
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September 13th, 2008 at 4:56 pm
“Its simple. The sue ‘em all campaign, launched by Vivendi Universal, EMI, Warner Music and Sony BMG’s RIAA (Recording Industry Association of America) in 2003 and adopted by Hollywood (with the software industry in the wings), was never about file sharing.
It’s about gaining complete and total control of how, where, and by whom ‘product’ is distributed and managed online.
And that’s all.”
Jon, I would add, that the relentless lawsuits had to be kept up, to “legitimize” passing all this draconian legislation, DRM etc and buy off all the right politicians. Just think, if they’d stopped suing, then how could they justify all these new enforcement outfits and laws they’re trying to pass? It would be a tacit admission that it’s ok to fileshare, wouldn’t it?
The old proverb that power corrupts was never truer than when applied to big business and politicians. This whole situation is sick, isn’t it?
September 13th, 2008 at 7:05 pm
Jon said:
“It’s about gaining complete and total control of how, where, and by whom ‘product’ is distributed and managed online.
And that’s all.”
Jon is absolutely correct, y’know.
But not anything you create yourself and wish to give away for free. They can’t touch that. That’s yours. But they will control their stuff and they will control a network that government and THEY bring to us if that is what it takes. Jon’s right. You can bet your life on that.
For years I’ve been blogging here that this is a far bigger issue than a few pilfered MP3’s and that online piracy will go down in history as the reason for an irreversible overhaul of the network we share. It’s happening now, and it’s inevitable, too Privacy laws are the privilege of a well ordered society. Take away the order and the privacy goes with it, and justifiably so. Read your history and try to see the bigger picture for once. You think “they can’t stop” you. You are right, but they can and will punish you badly and this alone will draw this to a minimum over time. So in effect, you are wrong.
There’s nothing new here, folks, and never was. We are all just sad witness to a protracted and deeply painful realignment of the people and their freedoms, the powers that be, a near global acceptance of the fundamental concepts of right and wrong (with pirates and hackers on the outside as usual) and new technologies so brilliant and powerful that they will continue to change the world and the way we live our lives forever. And they will be ours to use and enjoy, too, but only for as long as we demonstrate that we can be trusted not to abuse them. Our privilege of privacy and the use this network won’t be allowed to bring industry to it’s knees and stop the march of innovation, capitalism, organized government, the world economies and the tax base it generates in support of the service and betterment of humankind. Forget about it.
Every product and service that can move to digital and hence the internet, inevitably will. And it will be owned by somebody. And you won’t be allowed to hack it/distribute it/steal it without penalty unless they agree that you can.
Read that again.
It’s a far broader and more powerful truth than the “no loss/no harm” doctrine ever was. Three dimensional “printers” of a sort have existed for awhile now, but none of them will find their way into our homes and no 3-D models will be digitized and lost to the digital wild until piracy is brought under control. Olfactory has been able to be digitized for several years but odor has not yet moved to the network because if it did, there goes air fresheners, the perfume industry, anything we purchase for its smell. It’s irrelevant whether piracy is good marketing, or a form of “sharing”, or you personally believe it does no harm. It’s all beside the point. “They” are not going to allow you to have piracy as a standard for living and the sooner you wake up to this reality the sooner the growing legal carnage subsides. Piracy is a digital form of theft and you are regarded as a digital form of thief. You’d be wise to get used to this. This is not going away no matter how loud you demand your right to take something for free that was intended for sale.
You also don’t need to believe the **AA’s bullshit figures to believe that some percentage of sales loss is realistic when any given product can be taken for free. That one inconvenient truth is really all they need. And your preoccupation with the number of burners taken in a raid or the volume of movie tickets perhaps “not sold” or the editorial by Henry written to explain that because he comes from common roots and “loves” artistic product that he MUST be allowed to take for free…… that’s all just window dressing intended to distract from the real point. Here’s that point again:
“Every product and service that can move to digital and hence the internet, inevitably will. And it will be owned by somebody. And you won’t be allowed to hack it/distribute it/steal it without penalty unless they agree that you can.”
It’s not really industry that is driving this, y’know. Government is always busy with a zillion other things and like much in life, the squeaky wheel gets the grease, pun intended. The bottom line is government, the government is us (you DO vote, right?) and we/government need industry. We need the organization that corporations embody, the jobs, the place to foster R&D, the competitive base against foreign goods, the salaries they pay and the tax base it all yields. It doesn’t take a genius to realize that if retaining this requires a police state, then that is what we will get. There is nothing noble about stealing entertainment online and it’s not going to foster a new world order. Sorry to have to break it to you.
I’ve been pleading this for years.
So you see? It’s a lot bigger than you think. This is not about corruption. It’s also not a “taken-but-not paid-for” music recording or a copy of Iron Man that is at stake here, it’s the entire future feasibility of digital as a distribution method and nothing less than the validity of the internet as a business tool. THIS is what government is looking at, not a few fucking MP3’s. And your relentless refusal to get a clue will only ratchet up legislation and law enforcement. Punishments that will seem absurd in the face of a few pilfered movies will appear very much in proper scale when you consider that the entire global/digital industry and world governance is what is really at stake here. Don’t expect punishments to wither, folks, it gets a lot worse from here on out if this continues. It’s like driving a hundred miles an hour everytime you get behind the wheel and when you wind up in court demanding YOUR right to do WHAT YOU WANT in YOUR car and with YOUR gas and on roads YOUR taxes maintain. It’s beyond dumb-ass. Does anyone here really disbelieve this?
I’m an American and every study I can find indicates that college age is the spear point of piracy and even there, more than half of all American young people 18-24 still agree with:
“Business corporations generally strike a fair balance between profits and public interest”
Source: Pew Research Center “The Generation NEXT, January, 2007.
So most college kids know this is wrong. They do it, sure, they’re kids, but they are not morally confused and that’s key. My college age daughter brings large groups of friends here to the office all the time. They think what I do is cool and we talk about this issue a lot. And they are smart enough to know that someday it’s THEIR work and THEIR business that will be looted if this isn’t brought under control. They read the news and they are wising up, believe me.
Everyone who thinks about this deeply knows that these larger goals of order and commerce will be maintained. And anyone who believes that a minority online culture of IP theft and entitlement to something-for-nothing will actually prevail and derail the future of the internet as the greatest business tool ever invented has been spending too much time in their Mom’s basement downloading torrents. This was never all that complicated.
One last thought.
Instead of stealing product, why not offer up a reasonable alternative to the status quo? One that rewards effort and creativity and resonates with artists as well as pirates around the globe. Think it through and see if it can find traction. (“Pay what you want” is bull and we all see it and know it. That’s why so few try it.) I’m sick of advertising, too, and ridiculous concert prices, but none of you offer a workable alternative. And remember this: before the first infringement prosecution occurred hundreds of millions of dollars were invested in education about the validity of copyright protection, the sanctity of IP as property and the laws that exist or will exist to protect MY RIGHT to create and legally license my goods without you stealing them. I take no joy that Daniel Dove just got 18 months in prison but I fear this is just the tiniest beginning of this kind of tragedy. Unless laws radically change, a worldwide holocaust of government sponsored law enforcement will ruin our network to ensure the continuation of business life as we know it, and sites like this that encourage “sharing” will bear some degree of responsibility to the punishments to those they encouraged. Breaking the law is no respectable path forward and God knows I’ve been trying to be heard.
September 13th, 2008 at 8:43 pm
Heh.
Sam’s up to his apologetics again I see.
1. First, Privacy laws are not a “privilege” of a “well-ordered society”, or of any other sort: they are one among several issues which serve as the BASIC requirements for whether a given sociopolitical order should be permitted to continue to exist.
That’s right, “Sam”, I said it: PERMITTED.
Oppression is “inevitable” only to the extent that the victims continue to ALLOW it. Read the United States “Declaration of Independence”. Please note that the cadre of revolutionaries drafting that document did NOT describe the rights to “Life, Liberty, and the pursuit of happiness” as “the privilege of a well-ordered society”. Totalitarians speak of such things as “privileges”, “Sam — as do those who would apologize for their actions.
“Commerce”, Sam?
Like the British East India Tea Company?
It’s no secret that “commercial interests” have often served as excuses to justify tyranny. It’s also no secret that those benefitting from a given sociopolitical climate are the LAST ones to admit that the prevailing “order” is in need of reform.
You can’t blame them, really — mustn’t “bite the hand that feeds them”.
But no, “Sam” — the notion that “order and commerce” should serve as justification for tyranny? How can I put this as gently as possible?
Not fucking likely.
This time, it’s different.
This time, you have literally millions of people from all nations and all walks of life being propagandized, inconvenienced, and sometimes even terrorized to the point when they’re not going to TOLERATE it anymore.
Rest assured, “Sam” — “Alter or abolish” are no mere, empty words — they’re the sacred charge upon which every genuinely “free” society is based — that when the “Governed” cease to consent, then NOTHING — not “blood and soil”, and CERTAINLY NOT “order and Commerce” — will serve to prevent change.
“Most college kids know this is wrong” — Just like “most” of them new the Draft was “right” during the Vietnam war?
Just like most people were too apathetic to question the “Peculiar Institution” of chattel slavery?
This is no mere hyperbole, “Sam”: to believe that “Order and commerce” can trump real sociopolitical change is, quite simply, dangerously naiive.
You REALLY think the fact that “more than half” of the people bothering to participate in a few surveys gives you a valid perspective on what people REALLY think?
Also, you continue to use the term “stealing” — disregarding the fact that the vast majority of the “product” being traded on p2p networks would have long ago “lapsed” into the public domain if not for aggressive lobbying.
As usual, “Sam”, you’ve said nothing, and raised no substantive points, other than to make it amply clear that you’d gladly support an Orwellian future simply to preserve a climate of “commerce and order”.
You may live within the territorial borders of the United States, “Sam” — but rest assured: You’re no American.
September 13th, 2008 at 9:05 pm
The Canadian Conservative government collusion with US conglomerates is one reason I’m voting NDP in Canada’s election.
September 13th, 2008 at 10:15 pm
Okay. So now in Henry’s eyes I’m “no American.” I’m suggesting we figure out a way to change things legally and dial down the ugly prosecutions at the moment while he’s leading the charge right into the cell next to Daniel Dove and I’m “no American.”
Fair enough. I can live with that.
Henry and I started out very similarly, did you know that? He says that he’s a “sometime musician, wannabe writer, sporadic blotter, and lives in Pennsylvania.” I grew up in Pennsylvania. I was born in Pennsylvania. I went to high school and college in Pennsylvania, too. My little state college was so poor and so rural the administration leased the football field for grazing land in the off season. (true) In another thread I told Henry that I found myself dropped into Manhattan at the age of 23 at the end of a Billy Joel tour on which I worked lighting. I had no money and no contacts here. I spent the first night on a park bench. I’ve literally worked my way up from the street. Today we (my employees and I) license design support and touring consultation to entertainment, exhibit and special theatrical events all over the world. We use digital sparingly because some people try to steal it. We just did a fashion show in Mumbai. We design industrial shows all over Europe. We staged the 50th Anniversary of a big museum here in town not long ago. And I just sponsored a fresh water drive into Africa led by someone I know who produces motion pictures. She’s knows you steal her movies online and she’s a little worried you guys are trying to take her down, actually, although she doesn’t see exactly why she’d deserve that. She also contacted her LA legislators (as I have here in NY) and has assurances from folks a lot more powerful than me that time is on her side. I believe that, too. I don’t actually think online piracy has any clue where they are or what they are up against. The written law is the least of it. The real laws haven’t even been written yet. They will be. I like it that Henry figures he knows what’s going on from his house.
Henry apparently writes songs. This all got started when he whined “the only way out of this bullshit is to release my stuff gratis online with a little note to a paypal account or something, so that people can throw me a few bucks if they want to.”
So….. to that I suggested that real “ working professionals view things quite differently, and don’t regard their decision to embrace the future and work in a digital medium as an inherent capitulation to theft and nonpayment.”
So now Henry tries to ally me with the British East India Tea Company, (huh?) while he wraps himself in the glorious cloak of Throe, the Boston tea party, the underground railroad and even civil rights. I chided him actually, earlier, as the “Rosa Parks of online shoplifting.” LOL. Truth is, Henry champions hiding behind privacy laws (that his own actions are eroding, by the way), while stealing his entertainment in the security of his own home. More astoundingly, he compares this remarkably shitty behavior in front of his computer to those who faced grave danger in the American struggle for civil rights. That’s outrageous, frankly. You are a profoundly little man, Henry, and you are not ready for the professional world. In good faith to you, sir, you should be ashamed of yourself for a remark like that.
At the end of the day, Henry, I didn’t want to be a “sometime” anything, a “wannabe” anything, or a “sporadic” anything. I wanted to do something that would count for something and would last, for as long as copyright would protect my IP and keep it legally mine. You are an intelligent man, Henry, as am I, but I’m a lightyear smarter than you’ll ever be. If I can create some new ideas, license them legally, live a decent life, give a bunch of really talented folks an opportunity here and there, educate my daughter, entertain a whole lot of folks a whole lot of places, buy a house for my Mom, support charity I believe in, retire with some degree of dignity, leave a respectable inheritance to my kid and THEN the world can have all my work if they want it…….. I really am fine with that.
But it’s legally protected in the meantime so don’t steal it Henry, and stop pretending that it’s noble. You just look an asshole doing that.
September 13th, 2008 at 11:48 pm
Sam, you of all people should realize that it’s the victors who decide how history is written. The cartels have weight of finance and lobbyists, but they get that money from us, and we elect those they would have to petition. This only goes on so long as people are apathetic about it. Those who aren’t apathetic about it, are passionate one way or the other. I’ll tell you, the MPAA and the RIAA are going to need a lot more friends in the general populace the longer they keep this shit up. The nature of what they are doing and how they are treating their customers virtually ensures that anyone that does form an opinion on these issues will almost invariable change to the viewpoint of what ensures the most freedom. People in general don’t like to be shackled, economically, politically, physically. Enough people begin to realize what is going on with these bastards, and things will change quick.
Most of the legitimate businesses in this world try to increase their profits through a variety of means. Most means that people would consider reasonable include: producing a better product, innovating new products, increasing efficiency, developing new markets. Most organized crime syndicates also have standard methods of increasing their incomes. Some of these would be: Extortion, normally through an offer of ‘protection’ from the depridations of the same syndicate; Blackmail (gathering evidence illegally of someone with the intention of exposing some act or action of theirs), Bribery (offering a gift or gratuity to a public official in exchange for a favor). Now, compare legitimate business practices to the illegitimate business practices and think really hard about which types of practices you hear the RIAA trumpeting all over the place.
September 13th, 2008 at 11:55 pm
One last point I’d like to make. The section in the U.S. constitution that empowers congress to create and establish copyrights and patents states:
Article 1, Section 8 (Powers of congress)
“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”
Now if you sincerely believe that the current layout of copyrights adheres to promoting the progress of useful arts by securing for limited times the exclusive right to their works you are completely hopeless. In this country copyright exists for a ridiculous amount of time for each work, never passing into the public domain. This doesn’t promote the progress of the art. It promotes people quitting developing artistic works after a single creation, enabling them to exclusive income from it for life. You really want to promote the progress of the art? Take those exclusive rights away after 10 years and they’ll bust they’re asses to create new works, especially living the ridiculous and insanely lavish lifestyles they lead.
September 14th, 2008 at 5:00 am
“But not anything you create yourself and wish to give away for free. They can’t touch that. That’s yours.”
Only because the media companies didn’t always get their way. If they had, you’d need a license to own any kind of recording equipment at all, and blank media would be more tightly regulated than ammunition. Or did you miss the fact that the various content producers have opposed virtually every technical innovation from VCRs to DAT, to MP3 players?
“But they will control their stuff and they will control a network that government and THEY bring to us if that is what it takes. Jon’s right. You can bet your life on that.”
Answer me this; Why are movies and music now considered the most important product ever produced? Other products are much more important to most people’s lives, but to hear the media industry speak, you’d think the world revolved around their bottom line. They may be rich, but they’re not even the biggest industries. Why do they deserve so much more protection than anything else?
“There’s nothing new here, folks, and never was. We are all just sad witness to a protracted and deeply painful realignment of the people and their freedoms, the powers that be, a near global acceptance of the fundamental concepts of right and wrong”
Naturally, such concepts of right and wrong don’t apply to large corporations. They can bribe politicians into passing laws tailored to help their businesses, even to the detriment of other forms of business. They have gotten copyright terms extended to ridiculous lengths to keep any of their works from passing into the public domain, even though they have used public domain works to base their own work on. They have long sought to destroy or circumvent the “first-sale doctrine” which gives people a right to re-sell products that they have legally purchased. EULAs are written to give them all the rights and the consumer none, even to the point of allowing them to change the terms of the EULA at a later date. Software companies won’t even take responsibility for releasing defective products.
Why are content producers allowed to have all the rights and consumers have none? And please don’t tell me that consumers have brought this on themselves because all of the above has been going on long before large-scale piracy on the net became an issue.
“…the world economies and the tax base it generates in support of the service and betterment of humankind.”
It’s funny that you mention the “betterment of humankind”. The same IP laws that are being pushed by the RIAA and the MPAA also cover other things, like prescription drugs. Like the expensive heart medication that my friend is going broke paying for because those same IP laws won’t allow a generic version of the drug to be made for several more years. Other companies have been forced to stop work on superior drugs/devices because they infringe the IP of a company that is working on inferior products. Of course, what’s human life when a company’s profits are on the line?
“You also don’t need to believe the **AA’s bullshit figures to believe that some percentage of sales loss is realistic when any given product can be taken for free. That one inconvenient truth is really all they need.”
Agreed, SOME sales loss is realistic. The question is how much loss is actually going on? The MPAA claims that the movie industry is being “devastated” by movie piracy. Then they proudly announce that 2007 was a record-breaking year for them. How can both be true?
The question becomes; Is piracy a big enough problem to justify the steps being taken? If you’re selling CDs and you only make one sale, but 50,000,000 people have your music, then you have a serious problem. On the other hand, if you sell 5,000,000 CDs and you find out that 5,010,000 people have your music, is that going to cause your business to collapse?
I’m not suggesting that piracy should be completely accepted, I’m saying that the punishment should fit the crime. Right now, I can go out and physically injure someone, causing them not only pain and suffering, but also a loss of income from not being able to work and I’d spend less time in jail than someone who is caught giving away bootleg music CDs, which only cause a relatively minor financial loss to a multi-billion dollar corporation.
I dare you to answer the following question honestly; Which would you rather the local authorities spend their time and effort investigating and prosecuting, your next door neighbor who has uploaded a copy of a new movie, or the crack dealer selling drugs to the neighborhood kids in front of your home?
“It’s not really industry that is driving this, y’know. Government is always busy with a zillion other things and like much in life, the squeaky wheel gets the grease, pun intended.”
And I’m sure that the millions they donate to various politicians’ campaign funds have nothing to do with the spate of new copyright laws being pushed, right? How much does it cost to buy a politician these days anyway?
“The bottom line is government, the government is us (you DO vote, right?)”
90% of politicians lie. They will say anything to get elected and then immediately break their campaign promises. No matter who you vote for, they all end up the same. If by some miracle you do manage to elect an honest politician, they’re outnumbered by the corrupt ones and can’t affect any real change.
“We need the organization that corporations embody, the jobs, the place to foster R&D, the competitive base against foreign goods, the salaries they pay and the tax base it all yields.”
Yes we do. So why are all but one of the large music companies owned by non-Americans companies? Why are movies constantly shooting in Canada or other countries to reduce costs? Why has every tech company outsourced their tech support to India or Outer Mongolia, or wherever?
As for fostering R&D, as far as new technologies go, the content industries are its mortal enemy. The VCR was an innovation and the MPAA compared it to the Boston Strangler while trying to have the courts ban it. Consumer level DAT (Digital Audio Tape) devices were successfully kept out of the American market by the music industry. DVDs, which should have become a world-wide standard for video (unlike tapes which were limited by NTSC/PAL incompatibilities) were intentionally ham-strung by the imposition of region codes. Codes which supposedly protect the studios’ ability to distribute new movies in other countries, but which are also applied to films that are 20+ years old.
The content industry hates innovation with a passion.
“So you see? It’s a lot bigger than you think. This is not about corruption. It’s also not a “taken-but-not paid-for” music recording or a copy of Iron Man that is at stake here, it’s the entire future feasibility of digital as a distribution method and nothing less than the validity of the internet as a business tool.”
The problem is that it’s a business tool that the content industry completely ignored until they were forced to take notice of it. Now they’re trying to pretend that digital distribution is some great new innovation that they invented while keeping a plastic smile glued to their collective faces. They don’t WANT a new distribution method, they’re being dragged into it kicking and screaming, just like the movie industry was dragged into the era of home video kicking and screaming.
Do you really think that iTunes or the Amazon MP3 store would even exist today if pirates hadn’t shown them that there was a demand for digital copies of music?
Here’s an easy question for you; Which is more profitable, selling some copies or selling no copies?
There are movies being traded on the file sharing networks right this minute that aren’t available on DVD. Some aren’t even available on VHS, or they’re long out of print. Why? The studios don’t consider them worth the time and money to release. There’s obviously a demand for them, but until someone buys the rights to produce a DVD copy, the studios are content to just sit on them. Why? Why not produce a nice, clean, DRM-free digital copy and sell it right from their web site? People are already trading such copies of it, why not have the studio do it themselves and profit? But people would just pirate that copy, you say. Guess what? They’re doing that already! And if as you point out, pirates are only a small minority, then surely enough people would pay for a legal copy to justify the minor expense of putting a digital copy online. After all, people are making AVI copies for free with normal home computers, so how much could it cost the studios?
Want a real-world example? The animated movie “Heavy Metal” came out in 1981, but wasn’t released to home video until 1996. Why did it take 15 years for home video copies to become officially available? It took them that long to work out the rights to all the music in the movie. Meanwhile, bootleg copies were sold at SciFi conventions and people were trading copies recorded off the premium movie channels. Who benefitted from this? Not the people who wished to own a copy of the movie. Not the studios who lost out on 15 years of potential sales. Not the musical artists who missed out on 15 years of potential royalties. Who did copyrights help?
In this day and age, movie studios should be putting their entire catalogs up for sale as digital downloads. The cost to digitize the films would be next to nothing and the cost of bandwidth would be a drop in the bucket compared to having DVDs produced. Of course this will never happen. Not because they’re worried about piracy, but because they simply can’t see the value in doing this. Not to mention that they CAN’T do this with at least half their movies due to various rights issues. I find it amusing that the same studios who have fought so hard for stronger copyright laws find themselve unable to make use of a large portion of their old movies due to copyright issues.
“THIS is what government is looking at, not a few fucking MP3’s. And your relentless refusal to get a clue will only ratchet up legislation and law enforcement. Punishments that will seem absurd in the face of a few pilfered movies will appear very much in proper scale when you consider that the entire global/digital industry and world governance is what is really at stake here. Don’t expect punishments to wither, folks, it gets a lot worse from here on out if this continues. It’s like driving a hundred miles an hour everytime you get behind the wheel and when you wind up in court demanding YOUR right to do WHAT YOU WANT in YOUR car and with YOUR gas and on roads YOUR taxes maintain. It’s beyond dumb-ass. Does anyone here really disbelieve this?”
Everything the content industries have done up to this point have only made the situation worse. When Napster came along, did the RIAA even try to negotiate an agreement with them so that people could continue to share music, or did they jump right to suing them? And what wast he result of that? A centralized, network that was easy to target was shut down and several de-centralized and much harder to control networks sprang up to take its place. Now the content industries have to go after BitTorrent trackers and search sites, more of which spring up every day, eDonkey2000 servers, Kazaa users, etc. They made the situation worse, not better. Look at EA and the DRM they put on their game Spore; People have been bombarding Amazon with one-star reviews because of it. Not only that, but the game was available on the net BEFORE the official release, so the DRM clearly wasn’t effective and only pissed people off.
I can’t help thinking of a movie I watched recently called “Living Hell”, also known by the more descriptive title of “Organizm”. A large, growing organism is released from a military lab. Every time it’s shot, it grows. The solution? Drop bombs on it. This causes it to grow even more rapidly. The military’s solution to this? Drop bigger bombs. It grows even faster. Hey, let’s drop a nuclear bomb on it!
“So most college kids know this is wrong. They do it, sure, they’re kids, but they are not morally confused and that’s key.”
By contrast, I haven’t yet met a single adult, who when offered free movies or music, has said “No thanks, I believe doing so would be wrong.”
“Instead of stealing product, why not offer up a reasonable alternative to the status quo? One that rewards effort and creativity and resonates with artists as well as pirates around the globe. Think it through and see if it can find traction. (”Pay what you want” is bull and we all see it and know it. That’s why so few try it.)”
I already have the answer; Make DRM-free digital copies of music and movies as easy to buy as physical copies. Sell them at a reduced price to reflect the actual cost of creating them. Allow them to be sold at any valid online retailer, such as Amazon.
Will people still pirate? Yes. However if people are willing to buy music and TV shows from iTunes in a DRM-crippled format that only works with one device, don’t you think they’d be willing to buy unrestricted copies that would work on any device? A short time ago, I downloaded an old horror movie that isn’t available on DVD and is out of print on VHS. It took a long time to download and I had to try 3 different copies before I found one that was in English. When the movie finished downloading, the quality was lousy. If I could have gone to the studio’s web site, paid $5 and downloaded a clear, DRM-free AVI copy, I would have. Of course if legally downloading movies were even possible, it would be in DRM-crippled WMV format and cost a minimum of $15-20.
“And remember this: before the first infringement prosecution occurred hundreds of millions of dollars were invested in education about the validity of copyright protection, the sanctity of IP as property and the laws that exist or will exist to protect MY RIGHT to create and legally license my goods without you stealing them.”
Remember this; For every new advance in audio/video technology, the RIAA and MPAA have been right there screaming “BURN IT!!!” VCRs? Tools of the devil that will bring about the end of the entire movie industry! DAT? They’ll be the downfall of music as we know it! A DVR with the ability to skip commercials? Network TV is doomed!!!
“I take no joy that Daniel Dove just got 18 months in prison but I fear this is just the tiniest beginning of this kind of tragedy. Unless laws radically change, a worldwide holocaust of government sponsored law enforcement will ruin our network to ensure the continuation of business life as we know it, and sites like this that encourage “sharing” will bear some degree of responsibility to the punishments to those they encouraged. Breaking the law is no respectable path forward and God knows I’ve been trying to be heard.”
And if people weren’t breaking the law, all the content companies would be complete angels, bending over backward to please their customers? Somehow I don’t think so. As I’ve stated before, the MPAA tried to get the VCR banned before there was any evidence whatsoever that it would be used to pirate movies. Yes, it did get used for that occasionally, but it also opened up a new business model for Hollywood and now a significant portion of their profits come from selling copies of movies. None of which would have been possible if the MPAA had gotten their way. Just like home taping of music never killed off the music industry, contrary to their propaganda.
September 14th, 2008 at 6:11 am
lol
September 14th, 2008 at 9:17 am
Quote from Matt Phillips, director of communications for the British Phonographic Industry “It may be the case that artists and labels are happy to give some music away for free from time to time, but like anyone else, creative people have the right to be paid for their work.” does he really think that anyone really believes that the music business pays it`s artists fairly for their work and not just try to rip them off as much as they can, while trying to take away choice,control and overcharge the general public. Who are the real thieves and Pirates???
September 14th, 2008 at 10:17 am
@Sam I am: Sharing is not ‘piracy’. Nor is it ’stealing’. It’s sharing —- passing something along so someone else can enjoy it: spreading the good word, if you like. The concept applies to just about everything from which people derive pleasure.
In the case of music, if you enjoyed something you heard, you’ll want to hear more of it and at that point, you may go out and buy it. Or you may not. But you’ll certainly tell your friends and who knows, they may go and buy it. You know how it goes, Sam; you’re not an idiot.
You have the freedom to say what you want to say, and to try to convince people to see your point of view. If the Big 4 had their way, there’d be some kind of law banning that under penalty of being sued — unless, of course, you were talking about corporate product. heh
But keep it up, Sam. And keep it up Rekrul. And Henry. And Alan. And Free Thinker, and everyone else with a perspective.
That, not greed, is what makes the world go around.
I said at the beginning, “America isn’t becoming a police state. It’s turning into a massive entertainment division run by a handful of corporate dinosaurs fronted by groups of corrupt executive politicians.”
And I honestly believe that’s the way it is. But I believe just as earnestly that for the first time in history, we have the ability to change that because, also for the first time in history, everyone everywhere is in direct contact with everyone else, and that’s huge.
They’d like to change that, too, but the fact is: in this 21st digital century, information and intelligence, not money, are the currencies.
We have masses of both and they have little of either.
So definitely stay tuned.
Cheers!
September 14th, 2008 at 11:17 am
11 responses but only 401 page visits. You are pissing into the wind.
September 14th, 2008 at 1:44 pm
Sam,
Honestly, I could give two liquidy shits WHERE you came from, or whether you’re college was poor, or anything of the kind. The issue isn’t about where you come from, it’s whether you’ll condone the status quo — not “gleefully support” or “take joy in” it, but merely condone it.
You’ve consistently failed to actually address ANY of the points I — or Rekrul — or Sam — or Freethinker — raised. Original purpose of copyright law? “Useless history lesson for theiving fanbois”. Half-facetious admission that I’m not a mega-media God on my part? “I — unlike Henry — didn’t WANT to be a “sporadic” or “sometimes” anything. I wanted to create something that would last”
But “Sam”, that’s the whole point: That’s exactly why “useless history” like the Statute of Anne/The Constitution’s provisions about copyrights and patents/the public domain itself is so important. Y’ever heard of the “orphaned works” problem, “Sam?”
Also, Y’ever heard of “civil disobedience?” Draconian bullshit breeds resistance, or didn’t you catch any of the video fron Tien-An-Men square that time? The courts and prison system are already overburdened as it is, and our illustrious leader George “Shrubya” and his Neocon pals evidently see no problem whatsoever using practices which, if used by any other regime, would be considered torture and a violation of human rights.
But Y’know what? People speak up. That type of thing gets publicized, and people stand up. Speaking out IS powerful, “Sam”, and no amount of blither-blather about how it’s neccesary to “Order and Commerce” can EVER change the fact that a given action is unjustifable, and very likely indicative of total moral bankruptcy on the part of those taking such actions.
What part of this don’t you understand, “Sam?”
The part where the original British copyright law was a method to privatize censorship?
Or the part where the original justification for U.S. Copyright/patent law was to promote the “useful arts and sciences” by granted a LIMITED monopoly?
Or maybe the part where the “content” industries have successfully lobbied to have copyright law bloated FAR beyond any justifiable term, to the point where — barring a miserably few exceptions due to filing errors — NOTHING will enter “The Public Domain” ever again?
Or maybe the part where instead of FOSTERING innovations, runaway IP “law” is used on a routine basis to supress innovation?
Just curious, Sam — what’s your take on “Waterboarding”? I’ve talked to a lot or “right thinking Americans” — including members of my own family — who have no reservations about it whatsoever. Why? Well — the words of my Mom — “Them diaperheads to a whole lot worse to THEIR hostages.”
Maybe you ARE an American after all.
Feel free to continue applauding an Orwellian future, “Sam” — at least if it’s done under the banner of “Order and Commerce”, you’re sure to get paid well.
September 14th, 2008 at 1:52 pm
At Observer: Where do you get the page visits number?
Sam I Am: Is it really a right to say, “I thought of this and you can’t use my ideas.” The answer is a no. Why? Well, lets go back to the early 1900s. Lets start with the Wright brothers. They created the first prototype airplane in modern times. What would have happened if they patented the idea of using wings, so that no other company could create a flying machine with wings. Where would flight be? It’d be back a good 20 to 30 years, and the rest of progress back another decade or so.
Henry Ford did not create the assembly line. He merely used it on vehicles. Where would cars and assembly lines be if assembly lines were patented, and there was a high premium to use it? Many products use an assembly line for mass creation (Watch “How It’s Made” on the Discovery channel sometime), and we’d be back 50 to 90 years from such a patent.
IP only means to hurt the economy by restricting trade. Anything digital can be mass produced using only time and electricity. People should realize this, and understand that many of the comparatively expensive manufacturing of CDs would cause an economic loss in manufacturing jobs. But, with this loss, other things can be manufactured to regain jobs, or have more white collar jobs. Overall quality of life goes up, and everybody is happy, except those who have to change. But you know what? The only constant is change. Get use to it.
Jon: Excellent article (not news, article) that shows the problems of the RIAA, BSA, and MPAA. Only you left one major detail out. Copyleft with the MPL, GPL, CC, and countless more EULAs meant to act like they aren’t there.
September 14th, 2008 at 2:44 pm
You fascinate me, “Sam”: for someone purporting to have a college education and a thriving business enterprise, you sure seem to be unable — or unwilling? — to bother with things like research or thinking. I know it’s easier to regurgitate the RIAA’s misinformation and blithely assume they’re being truthful.
But, one question remains: WHY exactly you would even bother replying here at all.
I mean, if — as you assert — dissent on these issues is so negligible as to pose NO threat to the status quo of IP law — if the “sacred right” of content companies to near-perpetual monopoly over every use of “their” product is such a foregone conclusion — then why on Earth are you even bothering with the pretense of “debating” us over it?
By your own admssion even bothering to inquire into the history of copyright is a”useless history lesson”, and while you claim to “take no joy” in what the RIAA is doing, you most certainly approve of their tactics. You’ve made it amply clear that, in your view, this is about nothing less than the “Sacred right to property”, and that such a “sacred right” takes precedence over anything else, INCLUDING laws protecting privacy — which you consider to be nothing more than “a privilege” lawmakers should revoke at whim.
What’s your take on “habeas corpus”, Sam?
How ’bout the Fifth Amendment protection against self-incrimination?
How ’bout the Freedoms enumerated in the First Amendment to the bill of RIghts?
Are THEY “privileges” as well?
In truth, Sam, it’s copyrights and patents which are the “privileges”, and — as far greater minds than mine have amply demonstrated — should such PRIVILEGES come into conflict with fundamental RIGHTS, then the privileges will either have to be severely reformed — “altered” — or done away with entirely — “abolished”.
Exactly how clear can we be on this, “Sam”?
Barring the “Sonny Bono” bullshit, large amounts of content would have entered the public domain and become available to us all. Instead, that was thwarted by means of clever lobbying and a widespread apathy to the historical roots of IP law itself.
To put it bluntly, the RIAA have made the entire field of Copyright into a bad joke, and stirred up a bunch of people who’ve started to ask “inconvenient” questions not merely about “how long should copyright terms last”, but, more fundamentally, Should any such thing as “copyright” exist AT ALL.
But go right ahead, “Sam”: you just go right on ahead believing that this is all just about “teenage thieves” or whatever delusion they’ve fed you.
You think the Supreme Court are smart, right? Well, Stephen Bryer — now an associate justice of the Supreme Court of the United States — wrote something called “The Uneasy case for Copyright” back in the 1970s. So these issues are nothing new, ‘Sam”, and the longer this shit goes on, and the more jackbooting the RIAA and suchlike engage in, the “uneasier” the case will become.
But feel free to keep taking potshots at me, “Sam” — I find it by turns amusing and pathetic. You wanna “create something that will last?” Help ensure that there’s a “public domain” for it to enter someday. Otherwise, you’re stuff is destined to go one of two places: either to be bought up by “Big Media” — at which time you’ll lose all control whatsoever because, as you mentioned in regard to Fogerty, “sold is sold”.
Or — and this is vastly more likely — your stuff will be relegated to that vast “grey area” of “orphaned works” — stuff that can’t “legally” be used due to the complexities and monkeywrenching the RIAA have managed to do to copyright law over the years.
But hey, what do YOU care, “Sam” — by that time you’ll be dead, and — hopefully — been able to squeeze every possible cent out of every molecule of your “product”.
Rest assured, “Sam” — your support of the status quo will make a much bigger “difference” — and HAVE MUCH LONGER-LASTING EFFECTS — than your artistic creations ever will, and you can thank Big Media for that.
September 14th, 2008 at 7:01 pm
Establishment of Fascist-Entertainment Cartel of Big-Four (suing single moms and disabled people who once upon a time installed some programs on their PC) is very bad example how corrupted government demoralizes “democratic” society, where all “poor” people voices are ignored. This is similar to USSR where people where put in jail for jokes on party leaders.
Everyone who clicks on so called “illegal” download link (even having a Cat playing with computer mouse could be an issue) will be fined thousands dollars to scary out use of free internet. The problem is – there are no signs “Illegal” on internet comparing to speed limit signs to enforce max allowed speed by motorists; people even don’t know if particular song/radio/webcast is copyrighted or not.
September 14th, 2008 at 8:17 pm
“Sam”:
Presumably, you believe that the issues raised by p2p and runaway IP monopolies are of interest only to “thieving teenagers” (hence your idiotic claim that 18-25 yr. olds are the primary demographic involved with p2p usage etc.) You also disparaged my (innocent, I thought) inclusion of some historical background as a “useless history lesson”. Well, Sam, as you can probably tell, ya pissed me off, and — far from shutting me up or bolstering your own “side” of the debate, you’ve only succeeded in causing me to become even more skeptical about IP ingeneral. Thanks, “Sam”.
Since you don’t think history is particularly “useful”, you presumably won’t give a shit about this quote. Unfortunately for YOU (and the ill-informed nonsense you keep attempting to defend), I’m gonna post it anyway.
Remember a guy named James Madison? I presume that you do (being as you take pains to remind all of us that you’re “An American”)
Well, here’s what he said in regard to the monopoly powers granted via “Intellectual Property” legislation:
“But grants of this sort can be justified in very peculiar cases only, if at all; the danger being very great that the good resulting from the operation of the monopoly, will be overbalanced by the evil effect of the precedent; and it being not impossible that the monopoly itself, in its original operation, may produce more evil than good.”
Notice the caveat? IF AT ALL. He admits that “monopolies of this sort” can POSSIBLY be justified on the ground that they serve as incentive to produce, but he also admits that that these presumptive advantages can be “overbalanced” by the “evil effects of the precetend”, and that such might produce “more harm than good.”
Funny, “Sam”, but this is exactly what IP skeptics nowadays are saying.
Further, it illustrates that Madison did NOT regard copyright “protection” as a “fundamental right”.
Wouldn’t ya JUST know that I’d trot out some more “useless” links for Y’all:
http://www.techdirt.com/articles/20080220/020252302.shtml
Rest assured, people — more to come later!
(Or as Jon would say — “Stay Tuned!”)
September 14th, 2008 at 8:30 pm
Henry cried:
That’s right, Sam: barring the actions of said lobbyists, THE VAST MAJORITY OF THE CONTENT AVAILABLE ON P2P NETWORKS WOULD NO LONGER BE CLASSED AS ‘PROPERTY’, AND THUS, WOULD NOT BE ‘STOLEN’.
Yes, that’s very true, Henry, but it actually IS infringed property by law so what’s your point? By this impeccable logic, barring the actions of legislators making forcible rape illegal–the vast majority of violent sexual assault would no longer be classified as a crime either, and thus, would not be prosecuted.
Stay in the reality of the present, Henry. You are referring to things as they “should have been” missing the slightly larger, inconvenient fact that the rules are not as you would write them. Your cheap little remark “No research, no thinking” on this subject made me laugh. My lawyer and I have been deep in copyright legislation since about the time you were born.
from “HOW I LOST THE BIG ONE”
By Lawrence Lessig
“My anger with the conservatives quickly yielded to anger with myself. For I had let a view of the law that I liked interfere with my view of the law as it is.”
THAT’s why he lost, Henry. Lessig didn’t “fuck up” Eldred as you stated earlier, far from it, Lawrence Lessig is one of the most brilliant copyright thinkers and constitutional scholars in the modern era, but he just happened to be on the ethically wrong side of this debate all along, which the Supreme Court made abundantly clear. This was never even close. Lessig lost that decision 7-2 and the two dissents by Breyer and Stevens are pathetic, almost whining, and were justifiably set aside. You can read about it here:
http://en.wikipedia.org/wiki/Eldred_v._Ashcroft
My IP will not be orphaned, Henry, it’s set up for re-register and eventually becomes an ongoing trust to be leveraged as my daughter sees fit until expiration takes it away from her. I’ve been registering copyright for decades and it’s increasingly clear you have a big mouth and not the first clue. You’ve never registered product. You’ve never negotiated a licensing agreement. You have no employees, you’ve certainly seen no success in your “creative” ventures and likely, you’ve never run your own business, either. What DO YOU DO for a living, HENRY? Really, tell us. You are pontificating in theory about something with which—acknowledge it—you have none— and I mean ZERO— practical understanding.
Your Mother’s support of waterboarding doesn’t discredit her here nearly as much as the “two liquidy shits”, shoplifting potty-mouth she raised.
Go be civil disobedient, Henry, until Jon has to throw a fundraiser for you. So far your proven ability to raise two cats is your best credential here.
September 14th, 2008 at 9:14 pm
Hang on a minute - I thought from the p2pnet article below, Henry Ermich *is* Sam I Am!
Is this now two people or one schitzo?
Mussta missed something maybe??
http://www.p2pnet.net/story/16981
September 14th, 2008 at 10:31 pm
Sam,
Okay, lemme see if I understand your “thinking” here:
“Copyright infringement” == “violent sexual assault.
You tried this particular tactic over on Torrentfreak, and it made just about as much sense over there (which is to say “none”).
Where to even BEGIN with this?
How about the fact that, historically, women were considered “property” of their nearest male relative in many different cultures. Thus, laws against violent sexual assault (or more exactly, ANY nonconsensual sexual activity) represent a radical curtailment of those male relatives “property rights” over women.
In any case, your contention failed to actually address the fact that copyright and other forms of so-called “Intellectual property” consist of State-granted monopolies, for a “limited time”, with the sole intent of fostering “science and the useful arts”.
Comparisons to rape? Don’t make me laugh (actually, I figure that stupid shit like that says a lot about YOU, ‘Sam” — given the fact that proposed penalties for “copyright infringement” are rapidly EXCEEDING those for violent sexual assault.)
“That’s quite true, but it IS infringed property under the law”…..
So tell me, “Sam” — and be honest here: were the guys who dumped tea over the side of that ship “wrong” in that they violated the “property rights” of the ship-owner? (Actually, that’s far more arguable, in that there was actually something physical involved there, namely the tea.)
Your whole “position” here devolves to
1. Yeah, the media companies have been able to twist copyright into the opposite of what it was originally supposed to be, but, it IS the law.”
Quite simply, up until the “rape” compasirons, I retained at least a grudging respect for you.
Now, no. You’re an imbecile, and unworthy of further debate.
The fact that you’ve been able to play the current system to your own advantage makes it AMPLY clear that you’d defend said system.
Keep attempting your character assasination, “Sam” — it’s obviously the best you can do.
As for expiration “taking it away from her” — ’nuff said. You see it as being in your best interest to condone — or even actively help to bring about — the total destruction of privacy laws and the public domain. We get it, “Sam” — you derive benefit from the current climate, and — surprise of suprises — see no reason to even BEGIN to acknowledge the increasingly destructive effects of the status quo.
Freethinker: Me and Sam I am, the same person?
Nah — I can actually manage to read, and think coherently.
p2p == Rape.
Niiiice!
September 14th, 2008 at 10:43 pm
Freethinker: Me and Sam I am, the same person?
Nah — I can actually manage to read, and think coherently.
Ok, sorry. No offense meant.
September 14th, 2008 at 10:43 pm
“Zero understanding” of the law?
Heh.
Let’s take a different approach, here:
How about laws relating to “miscegenation”, “Sam”.
How about “separate but equal”, “Sam?”
How about women’s suffrage, or voting rights for 18 year olds, “Sam?”
How about “Prohibition”, ‘Sam’?
Laws can be (and very often ARE) changed, but all such changes in the law are preceded by corresponding changes in people’s opinions and views on a given issue. The fact is, “Sam”, that IP in all forms is a State-granted monopoly power (regardless of whatever fill-in-the-blamks bureaucratic nonsense you want to blather in this regard, THAT much is clear even to someone like myself who has “zero” understanding — as opposed to a pseudo-intellectual mastermind such as yourself.)
You haven’t once even attempted to challenge that (other than your idiotic claim that IP represents a “fundamental human right”, which I demonstrated to be patently false via my “Statute of Anne” link.) No, all you’ve done is repreated bleating of some variation of “it’s the laaaaw! It’s the Laaaaw!” in order to — you hope — sidestep having to actually ADDRESS any of the points we raise.
You flatly discount even the IDEA of civil disobedience, regard privacy as a “privilege”, and — despite your spittle-dripping whingings to the contrary — have absolutely NO interest in “the wonderful free network we all share”.
Now actually answer the points raised, or go back to masturbating over printouts of the DMCA.
September 14th, 2008 at 11:33 pm
fuck copyright
look at all the BIG winded BS above.
WHOLLY CRAP BATMAN
its a right we give
and its one we should now take away and then have them cry a little, all they are doing now is shoving up all YOUR ASSHOLES.
YOU want change
Leave mixed cds everywhere you can
put a movie on , two tv eps
leave a dvdr
leave tons a music
Start taking it to the streets
put your money where your mouths are and share properly.
Next phase is to also start picking movie theatres (
September 15th, 2008 at 12:56 am
*sigh* on how we could let this happen. Im just wondering if there were any links between 9/11 and this chain of events. We already know the government is corrupted so its quite plausible. This is very effective on tagging everyones movements and all.
Anyhow, back to issue on hand. IP should be open till it is used for profit. Of course this is not a “one size fits all” issue.
Musicians should release their music for free and perform at concerts for income. They still can grab sponsors and investors and still make a pretty penny. Plus the audience is now greater. Consumer has free music and musicians have good income, win win.
Movies on the other hand should focus on quality where the consumer would feel obliged to purchase a ticket or buy the dvd. Quality of movies improves. Consumer wins.
Games are flexible in having in-game advertising and should be offered on a content provider like steam where it also acts as a service. I actually dont mind paying stuff on steam cause i had to reinstall xp numerous times and downloading steam makes it that much easier. Consumer and Developer win win.
Software - Companies that use the software are obliged to pay the license fees. For the individual, it opens the market for users that will have a ripple-effect where one person will tell another about the software. Developers have bigger base, more profit, win win.
Books - Publishers can offer users who bought the book additional online content for free as an incentive to purchase the copy. Well, as a student of Uni myself, i prefer books > digital books and i dont think im the only one in this category. It will survive.
What else is there?
Its just a matter of adapting. Seriously its not hard to change the system to your benefit. All that the “Entertainment Cartels” are doing is denying the inevitable by holding on like dinosaurs.
If i get caught, i’ll just do a case of “civil disobedience” and hopefully people will follow. Im still going to download no matter what. The **AA can shove its laws up its ass for all i care. I’ll just cause such a fuss that i hopefully can get the local current affairs tv show in. They will bite at anything to get ratings.
The one thing that i am royally pissed off about is that fileshares are charged worse than if you actually stole the physical content in the first place. Its like wtf. Besides, police should worried more about drugs, alcohol abuse, vandalism and ACTUAL theft over file-sharing.
Now, we talked so much about the **AA, but who on earth knows the identity of the CEO? We need to give that bastard hell.
September 15th, 2008 at 2:11 am
Truth be told, I almost respect “Sam”.
After all, he doesn’t even begin to make a pretense of actually understanding the roots of IP law — characterizes such an inquiry as a “useless history lesson”.
First he claims that the copyright monopoly is a “fundamental human right”. Then when confronted with the irrefutable fact that copyright is a relatively recent invention, all he can come up with is bombastic gibberish about how he believes owners should have “exclusive control” of their content “for a significant time”.
It’s obvious that he believes the original 11-year term isn’t “significant”, given the fact that he sees the expiration of copyright as “taking away” from his daughter. It’s obvious he doesn’t give two liquidy shits about the “public domain”, either.
When confronted with the numerous exceptions and caveats which ALREADY riddle copyright law — such as “fair use” and the “first sale doctrine”, “Sam”’s approach is to either ignore the issues raised entirely or engage in some kind of half-witted attempt at character assasination and personal insults.
THEN when finally cornered into admitting that lobbyists have basically hijacked copyright and turned it into what amounts to a perpetual monopoly, the best he can come up with is “Quite True, Henry”, and more pissy little jibes at me/my competence/my commie-anarchist leanings/etc.
Oh, and let’s not forget the claim that I have “zero understanding” of the issues at hand. Despite having provided copious links to other sources — STARTING with the statute which is at the root of virtually EVERY copyright law now extant in the English-speaking world.
To be quite honest, I’m not that suprised.
“Sam” is merely a symptom of just how successful a job the RIAA has been able to do, and how far there is left to go.
September 15th, 2008 at 2:25 am
Oh, and as for your accusation of me being a “shop-lifting potty mouth”:
“People do shitty things all the time” — or dare I not quote back your own words to you (yet again!)
Y’know, this really interested me at first.
“Debating” with a pseudo-intellectual who claims I have “zero understanding” of the issue, (despite my having provided copious links to supporting documentation), who completely refuses to actually answer any of the points raised, and whose best “responses” consist of nothing more than petty personalistic gibes is, to put it bluntly, boring as hell.
No, I’ve never wrangled the bureaucratic beast in the ways you describe, “Sam”.
I’ve never bribed lawmakers, either.
Nor have I ever owned slaves.
Nor have I ever traveled to Bangkok to engage in sex tourism.
Nonetheless, lacking intimate knowledge of the minutae related to every aspect of the above activities in no way means that I have “zero understanding” of them. As I said — you feel it is in your vested interest to support a legal climate which aims to freeze the “public domain” at 1923. We all understand that.
But at least have the common courtesy to actually post meaningful responses.
If this is the best you can do, then — as I said originally — why am I even bothering?
September 15th, 2008 at 6:56 am
@ Ryan Scott Scheel:
“Where do you get the page visits number?”
At the bottom of every page, immmediately under HOME (861 as a I write this).
Cheers!
September 15th, 2008 at 8:42 am
As a free person I have the rights to do as I please without anyone’s permission as long as I don’t hurt anyone. Filthy rich persons and companies are definitely not hurting.
If someone tells secret to another it’s not a secret any more. If one of these people tell someone else it’s public domain.
How much is your freedom and privacy worth? Here is mine take on it.
Notice to anyone trying to restrict my fundamental rights:
My prices;
If you breach my privacy and or freedoms you and your associates will pay $1 billion dollars in gold and or 90% of your total worth payable in gold.
If you come and hassle me against my constitutional rights it’s $1 million in gold.
If you arrest me it’s $5 million in gold.
For every day spent in anyone’s jail $10 million in gold.
If you bring me to court unlawfully [I recognize common law only] it’s $50 million in gold.
For whatever price you put on your wrongful losses my price is to add a zero to your price, payable in gold.
Prices are subject to change as I see fit.
You have just been served Notice of Understanding and Intent, plus Remedy.
Hint: this is the only way to fight the greedy and control freaks. Anything else is just lip service.
September 15th, 2008 at 8:46 am
And I will add: you must also repair what you have caused to my satisfaction!
September 15th, 2008 at 10:43 am
Grabs the popcorn and waits for samiam to spout more crap.
Man this is better than anything hollywood could come up with.
September 15th, 2008 at 12:11 pm
What’s really interesting to me here is, I’m at least vaguely sympathetic to “Sam”’s position:
See, knowing WHY a particular law exists simply “never comes up” for most people.
Most folks just blithely assume that how things ARE is how they “always were”. That’s why history strikes so many people — such as Sam — to be “useless”: who needs to understand the original INTENT of a given class of “law”: it’s enough that one be able to use the law to attain maximum social and economic leverage over others.
“Sam” puts on a big show about how “industry is people”, and tries — unsuccessfully, of course — to put a “human face” on the Corporate Megaliths which are rapdily ushering in what amounts to “digital feudalism”. It won’t work.
IP “law” was essentially a type of “bribe” — a “perk” extended to the “content industry” for a LIMITED TIME, as an added incentive to produce. It’s wasn’t — and ISN’T — a “fundamental right”, and — despite most of us never having slogged through the endless blizzard of bureaucratic nonsense your pals at the RIAA/MPAA have managed to create, we’re still smart enough to know when we’re being screwed.
Corporations ARE “people” — or at least, governments grant them the status of “legal personhood” that is from a legal standpoint seperate from the “personhood” of their employees or even their Executive board. So yeah, we understand the “industry is people” — in the case of the RIAA/MPAA, a few vastly wealthy, politically-savvy, morally bankrupt “people” who have lobbied for decades to successfully retain posession of what — by the ORIGINAL INTENT of IP legislation itself — SHOULD have been opened to us all, long ago.
But, “Sam” — and the suit-and-tie vermin he applauds — figure that all-but-perpetual monopoly backed up by threats and harrassment is their “fundamental human right” — whereas privacy, for instance, is merely the “privilege of a well-ordered society”, to be sacrificed at legislative whim should such action become neccesary for the preservation of “Order and Commerce”.
Oh, but wait — this isn’t merely a greasy, grasping, willfully-ignorant RIAA shill we’re talking about — he’s REALLY continuing to support current IP laws for his DAUGHTER — lobbying the State to preserve that monopoly for as long as possible.
For you see, from “Sam’s” point of view, the mere existence of the “Public Domain” is the vilest sort of atrocity, and the threat of the coercive monopoly’s expiration “taking away” from his daughter simply cannot be tolerated.
Historical roots of IP law? Who needs history? What’s important, according to “Sam”, is that we “Stay in the reality of the present” — and presumably, continue to sit idly by while the “Cartels” lobby the public domain which is “robbing” them — and the privacy rights behind whch we supposedly “hide” in order to commit the greivous sin of failing to “rent” the broken, DRM-laden wreckage of our cultural heritage from them until the end of time.
See, we’re all stupid. Anyone who can’t — for whatever reason — manage to successfully wrangle the rats-nest of Red tape Sam’s pals over at “Big Media” and “big pharma” and those other wondeful multinational “persons” have created, should just swallow it. They’ve been able to get the State to agree that ten thousand years would still constitute a “limited time?” Well, too goddamn bad. That’s just the “cold, hard realities of business” and we should all “grow a pair and learn to compete.”
Libraries? Fuck ‘em.
Documentary film-making? Artsy crap that nobody really watches.
“Unauthorized public performances” of a copyrighted song at a child’s birthday party? “Think of the chiiildren.”
But hey, we have “zero understanding”, so the sheer weight of history itself can safely be ignored, right???
I’m not going to play anymore, folks: “Sam’s” inane, spittle-spraying, hamfisted attempts to defend Digital feudalism, and his truly sad and desperate need to take “pot shots” at me/my wife/our pets/anyone and anything which he cannot manage to intimidate or BUY OFF — nah. I’ll just keep posting my “useless history lessons” and “Sam” will continue ignoring them, secure in the knowledge that Corporate feudalism is inevitable.
Ain’t life grand?
September 15th, 2008 at 12:41 pm
“Grabs the popcorn and waits for samiam to spout more crap.
Man this is better than anything hollywood could come up with”
LOL.
Climb the clocktower with a rifle, Henry. You know you want to. LOL
And you misunderstood. In no way did I compare online piracy to rape. You stated that if the legislature had not extended copyright, then the downloading wouldn’t be illegal and I didn’t disagree with you. All I said was….. had (even) sexual assault (or any other crime) not been rendered illegal by legislation, then that too would be legally permissible. Your logic is empty. That’s all. Like your career. What do you do for a living, Henry?
We just finished staging Fashion Week here in Bryant Park. Huge tents, hundreds of fashion designers from all over the world, thousands of participants, a massive temporary infrastructure we help to design and they set up and take down twice a year. Every dress design, every set and lighting design, every photo taken by every press photographer, every video, every TV interview, every webcast…..100% locked up intellectual property. 100%. Suck on that for awhile.
Anyone reading Jon’s page understands that you genuinely believe you know something/anything about all this from your computer in Pennsylvania, like a man who’s never actually been in the water but once read a book on swimming.
Believe/download/carp/civil disobey as you wish, my friend. We are all in this together and it’s all fair, right? I support your ability to do whatever you’ll do, just as I support an organized society’s right to lock your dumbass up when that time comes. It’s pretty ironic that you find me ungenerous for not wanting to release our creations to public domain when you are not making any in the first place. LOL.
And just when I think you’ve said the most naive, unknowing things possible, you keep talking.
Keep talking, Henry.
But put the rifle down. LOL
September 15th, 2008 at 3:16 pm
Sam:
“Naive, unknowing things possible?”
Now, that’s fascinating, “Sam”:
A vulture like yourself — completely unconcerned about what things like copyright/patents were originally supposed to do, and you accuse me of being”unknowing” and “naive”.
But see, that’s where what you deride as “useless history” comes in: the more people learn, the less they’re apt to allow themselves to be continue to allow themselves to be screwed over. Glad to hear about Bryant park, “Sam” (although I fail to see how that’s actually relevant to anything we’ve discussed here.)
Now, be a good little RIAA shill and answer the question:
1. what was the original intent of IP law?
2. What is “civil disobedience”?
3. What is your stance on the “public domain?”
4. Is Privacy a “privilege” to be revoked if it conflicts with the whims of corporate lobbyists?
The “waters” in which you swim are — to you — completely beyond any question (or possible reproach). We undestand that, “sam”.
We also understand that you’re reluctant to actually answer any questions, which is fine.
So go right ahead, li’l buddy — try to “discredit” me (as if that’ll actually do one single bit of good).
Of course it’s “locked up”, “Sam” — you and your buddies at the RIAA have made amply sure of that.
And as per your request to “suck on that”? If I may be so bold (try and stop me you mindless corporate shill), we’ve been “sucking on it” in regard to IP monopolies for DECADES, and a growing number of us are good and sick of it.
“Sam”, as per usual you’ve raised no actual points and answered none of the questions which were put to you.
Of course, you CAN’T actually answer any of the points raised because to your line of ‘thinking’ none of it makes any sense: You’ve been so thoroughly propagandized into believing in this mythical “fundamental human right” to perpetual monopoly power enforced by the State that even QUESTIONING such an axiomatic idea is impossible for you.
We all understand that, “Sam”. It’s also not surprising that — when confronted with the evidence which contradicts your deeply cherished assumptions, that your first instinct would be to completely ignore such evidence and/or attempt to discredit the messenger(s).
Thus we get your snippy little asides about the fact that I’m just a regular person — as opposed to, let’s say, an RIAA lobbyist or an apologist for such.) Go for it — ignore the warning signs. Feel free to completely disregard the fact that — whatever you may think about it — there IS a growing movement on many different fronts which has begun to call your type out in regard to the colossal “screwjob” your buddies in “Big Media” and “big pharma” have been able to give us.
“Massive outdoor installations” won’t disguise that fact, “sam”.
Kathy Lee Gifford feigned surprise when confronted with irrefutable evidence that her clothing-line used third-world child labor.
So it’s certainly no shock that a “person” such as yourself would react this way.
Enjoy the popcorn, “Sam” — it’s shaping up to be something of a “slasher” flick
September 15th, 2008 at 5:28 pm
Sam,
Seriously now — your complete (willful?) inability to actually formulate a coherent or meaningful response to any of the points I’ve raised? I find it encouraging, myself. I mean, here you are, big-time IP mogul or whatever it is that you do - skilled, college-educated, supposedly clawed your way up from the same basic lower-middle-class backwater as I’m in now, and yet you can’t even be bothered to actually answer any of the points I raised. Oh wait — that’s right, you DID actually answer them all, by conceding that my basic claim in regard to the extention of copyright terms was “quite true”.
Rifle, “Sam?”
Nah. To be honest, you’re probably “just some guy”, same as me — a little more “investment” in the status quo, a little more “advantage” in supporting the RIAA (and, not coincidentally, the complete destruction of any form of “public domain” whatsoever), but — ultimately, just like me — you’re small-time.
Willfully ignorant on this issue, obviously very convinced of your own self-importance simply because you know the intricacies of the Red-tape swamps better than some of us, but ultimately just another really small fish in a rapidly-draining creek.
Do I “condone” civil disobedience/”illegal” downloading?
It’s not my business to condone OR condemn. I mentioned “the statute of anne” because it’s true. I mentioned the “limited” scope of IP “protection” because THAT’S true, too. I mentioed the RIAA’s egregious expansion of copyright terms because THAT’S true, too.
Whether you, me, or ANYBODY thinks it’s “right” or “wrong”, the fact remains that a steadily-increasing number of folks are starting to question how IP law is being used (and, sometimes, even if it SHOULD be used, at all). A large number of them are beginning to flout such “laws” at every available opportunity. Quite simply, it’s a matter of principle.
You understand “principles”, don’t you “Sam?”
No rifle and clocktower for YOU, Ole buddy, sorry to dissapoint you. First, like I said, you’re essentially nobody, and secondly, that’s not my deal. I’m not a street-fighter. Despite whatever idiocy you try to throw at me, I’m not just some yahoo with “zero understanding” of these issues — in fact, as I’ve pretty conclusively demonstrated over the last what, 20 messages, now, I evidently know a HELL of a lot more about the history, justification, and (more importantly) LIMITS of IP “protection.”
So Sam? Do us all a favor here: just take a big ol’ deep breath, swallow hard, and repeat this phrase:
“Quite right, Henry.”
‘Nuff said.
September 15th, 2008 at 10:11 pm
Sam,
“Stay in the reality of the present, Henry. You are referring to things as they “should have been” missing the slightly larger, inconvenient fact that the rules are not as you would write them.”
The correct statement would be that the rules are not as they should be.
“Your cheap little remark “No research, no thinking” on this subject made me laugh. My lawyer and I have been deep in copyright legislation since about the time you were born.”
You may have been involved in copyright legislation for decades, but it’s the twisted, corrupted copyright legislation bought by the media corporations, not the copyright legislation that was originally intended.
“My IP will not be orphaned, Henry, it’s set up for re-register and eventually becomes an ongoing trust to be leveraged as my daughter sees fit until expiration takes it away from her.”
You and all the other content producers have been brainwashed by the media propaganda into believing that copyrights were created for exactly the opposite purpose as they were originally intended for. The original creators of copyright law saw copyrights as a necessary evil to prvide encouragement to authors before their work *INEVITABLY* passed into the public domain for the good of all. You and all the other content producers seem to view things like the public domain and fair use as being vile, evil things that seek to take away your “right” to perpetual ownership of everything you’ve ever created.
Read up on the origins of copyright law sometime. The creators of it saw the danger in copyrights, which is why they put limits on them. Every single un-biased study done on the issue has found that society would be better off if copyrights and the length of IP protection were REDUCED, not extended. Copyrights were never intended to provide welfare for your grandchildren.
“I’ve been registering copyright for decades and it’s increasingly clear you have a big mouth and not the first clue.”
And you remind me of kids today who think that video games started with the original Playstation.
September 15th, 2008 at 11:26 pm
Rekrul:
Thanks. I was getting tired of reiterating the same points over and over in the vain hope that it would achieve something.
You very eloquently put the final “nail” into that particular “coffin” in a manner that, frankly, I couldn’t manage to do.
Now, we’re hopefully done with that particular horror-show.
September 16th, 2008 at 5:12 pm
Who says that file sharers are not creating? I have released software into the public domain several times. I like to make a living programming, and I do, but I don’t like the B.S.A., M.P.A.A., R.I.A.A., or any of the other bully organizations which seek to protect the greedy and hold back society’s advancement. These bully organization seem to only protect the large “creators” and not the small. Anyway, I don’t think there would be so much sharing if there wasn’t so much copyright abuse and overpricing. As far as the net coming under control of the copyright monopolies and governments, alternative are already are being set up, so the cat and mouse games will continue.
September 16th, 2008 at 6:53 pm
” Thanks. I was getting tired of reiterating the same points over and over in the vain hope that it would achieve something.
You very eloquently put the final “nail” into that particular “coffin” in a manner that, frankly, I couldn’t manage to do.”
My pleasure.
September 17th, 2008 at 3:15 am
So why does this website waste it’s time posting trivel like this ? first of all everybody knows that the US congress and the US goverment is corrupt to the bone and they take kickbacks and bribes from the entertainment cartels.
It is NEVER going to change.
.The US goverment supports all kinds of obsolete business models such as silly(civil sevice) tax supported military exchange retail outlets that are badly managed and don’t make a profit and private business contractors that generally rip of the federal goverment.
The US congress supports billions of dollars worth of useless pork barrel spending.
The federal goverment has always propped up failing businesses for bad business practices or other wise providing corporate welfare (PROTECTIONISM)for other failing american businesses other than the entertainment cartels.
If i think about the business practices of the movie and recording industry i think of ANTITRUST SUIT……………
GET OVER IT……………THINGS ARE NEVER GOING TO CHANGE.
DON’T BUYT THIER PRODUCTS AND WHY DON’T YOU QUIT YOUR CRYING ………………………
Competition law
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“Antitrust” redirects here. For the 2001 film, see Antitrust (film). For laws specific to the U.S., see United States antitrust law.
Competition law, known in the United States as antitrust law, has three main elements:
* prohibiting agreements or practices that restrict free trading and competition between business entities. This includes in particular the repression of cartels.
* banning abusive behaviour by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position. Practices controlled in this way may include predatory pricing, tying, price gouging, refusal to deal, and many others.
* supervising the mergers and acquisitions of large corporations, including some joint ventures. Transactions that are considered to threaten the competitive process can be prohibited altogether, or approved subject to “remedies” such as an obligation to divest part of the merged business or to offer licences or access to facilities to enable other businesses to continue competing.
The substance and produce of competition Act vary from jurisdiction to jurisdiction. Protecting the interests of consumers (consumer welfare) and ensuring that entrepreneurs have an opportunity to compete in the market economy are often treated as important objectives. Competition law is closely connected with law on deregulation of access to markets, state aids and subsidies, the privatisation of state owned assets and the establishment of independent sector regulators. In recent decades, competition law has been viewed as a way to provide better public services.[1] Robert Bork has found that competition laws can produce adverse effects when they reduce competition by protecting inefficient competitors and when costs of legal intervention are greater then benefits for the consumers.[2] The history of competition law reaches back to the Roman Empire. The business practices of market traders, guilds and governments have always been subject to scrutiny, and sometimes severe sanctions. Since the twentieth century, competition law has become global. The two largest and most influential systems of competition regulation are United States antitrust law and European Community competition law. National and regional competition authorities across the world have formed international support and enforcement networks.
Contents
[hide]
* 1 History
o 1.1 Roman legislation
o 1.2 Middle ages
o 1.3 Renaissance developments
o 1.4 Restraint of trade
* 2 Today
o 2.1 United States antitrust
o 2.2 Development in other countries
o 2.3 European Union law
o 2.4 International enforcement
* 3 Theory
o 3.1 Classical perspective
o 3.2 Neo-classical synthesis
o 3.3 Chicago School
o 3.4 Policy developments
* 4 Practice
o 4.1 Collusion and cartels
o 4.2 Dominance and monopoly
o 4.3 Mergers and acquisitions
o 4.4 Public sector regulation
* 5 See also
* 6 Notes
* 7 References
* 8 Further reading
* 9 External links
[edit] History
Competition law
Basic concepts
* History of competition law
* Monopolization
o Coercive monopoly
o Natural monopoly
* Barriers to entry
* Market power
* SSNIP test
* Relevant market
* Merger control
Anti-competitive practices
* Collusion
o Formation of cartels
o Price fixing
o Bid rigging
* Product bundling and tying
* Refusal to deal
o Group boycott
* Exclusive dealing
* Dividing territories
* Conscious parallelism
* Predatory pricing
* Misuse of patents and copyrights
Laws and doctrines
United States
* Sherman Antitrust Act
* Clayton Antitrust Act
* Robinson-Patman Act
* FTC Act
* Hart-Scott-Rodino Act
* Merger guidelines
* Essential facilities doctrine
* Noerr-Pennington doctrine
* Rule of reason
Europe
* European Community
competition law
* Irish Competition Law
* Competition Act 1998 (UK)
Australia
* Trade Practices Act 1974
Enforcement authorities and organizations
* International Competition Network
* List of competition regulators
edit box
Main article: History of competition law
Laws governing competition law are found in over two millennia of history. Roman Emperors and Medieval monarchs alike used tariffs to stabilize prices or support local production. The formal study of “competition”, began in earnest during the 18th century with such works as Adam Smith’s The Wealth of Nations. Different terms were used to describe this area of the law, including “restrictive practices”, “the law of monopolies”, “combination acts” and the “restraint of trade”.
[edit] Roman legislation
See also: Roman law
An early example of competition law is the Lex Julia de Annona, enacted during the Roman Republic around 50 BC.[3] To protect the grain trade, heavy fines were imposed on anyone directly, deliberately and insidiously stopping supply ships.[4] Under Diocletian in 301 AD an edict imposed the death penalty for anyone violating a tariff system, for example by buying up, concealing or contriving the scarcity of everyday goods.[5]
More legislation came under the Constitution of Zeno of 483 AD, which can be traced into Florentine Municipal laws of 1322 and 1325.[6] This provided for confiscation of property and banishment for any trade combinations or joint action of monopolies private or granted by the Emperor. Zeno rescinded all previously granted exclusive rights.[7] Justinian I subsequently introduced legislation to pay officials to manage state monopolies.[8] As Europe slipped into the dark ages, so did the records of law making until the Middle Ages brought greater expansion of trade in the time of lex mercatoria.
[edit] Middle ages
See also: Lex Mercatoria and Guilds
Edward III during the Black Death enacted the Statute of Labourers to cap wages, and provide double damages against infringers
Edward III during the Black Death enacted the Statute of Labourers to cap wages, and provide double damages against infringers
Legislation in England to control monopolies and restrictive practices were in force well before the Norman Conquest.[9] The Domesday Book recorded that “foresteel” (i.e. forestalling, the practice of buying up goods before they reach market and then inflating the prices) was one of three forfeitures that King Edward the Confessor could carry out through England.[10] But concern for fair prices also led to attempts to directly regulate the market. Under Henry III an act was passed in 1266[11] to fix bread and ale prices in correspondence with corn prices laid down by the assizes. Penalties for breach included amercements, pillory and tumbrel.[12] A fourteenth century statute labelled forestallers as “oppressors of the poor and the community at large and enemies of the whole country.”[13] Under King Edward III the Statute of Labourers of 1349[14] fixed wages of artificers and workmen and decreed that foodstuffs should be sold at reasonable prices. On top of existing penalties, the statute stated that overcharging merchants must pay the injured party double the sum he received, an idea that has been replicated in punitive treble damages under US antitrust law. Also under Edward III, the following statutory provision outlawed trade combinations.[15]
“…we have ordained and established, that no merchant or other shall make Confederacy, Conspiracy, Coin, Imagination, or Murmur, or Evil Device in any point that may turn to the Impeachment, Disturbance, Defeating or Decay of the said Staples, or of anything that to them pertaineth, or may pertain.”
Examples of legislation in mainland Europe include the constitutiones juris metallici by Wenceslas II of Bohemia between 1283 and 1305, condemning combinations of ore traders increasing prices; the Municipal Statutes of Florence in 1322 and 1325 followed Zeno’s legislation against state monopolies; and under Emperor Charles V in the Holy Roman Empire a law was passed “to prevent losses resulting from monopolies and improper contracts which many merchants and artisans made in the Netherlands.” In 1553 King Henry VIII reintroduced tariffs for foodstuffs, designed to stabilise prices, in the face of fluctuations in supply from overseas. So the legislation read here that whereas,
“it is very hard and difficult to put certain prices to any such things… [it is necessary because] prices of such victuals be many times enhanced and raised by the Greedy Covetousness and Appetites of the Owners of such Victuals, by occasion of ingrossing and regrating the same, more than upon any reasonable or just ground or cause, to the great damage and impoverishing of the King’s subjects.”[16]
Around this time organisations representing various tradesmen and handicraftspeople, known as guilds had been developing, and enjoyed many concessions and exemptions from the laws against monopolies. The privileges conferred were not abolished until the Municipal Corporations Act 1835.
[edit] Renaissance developments
See also: Renaissance
Elizabeth I assured monopolies would not be abused in the early era of globalisation
Elizabeth I assured monopolies would not be abused in the early era of globalisation
Europe around the 15th century was changing quickly. The new world had just been opened up, overseas trade and plunder was pouring wealth through the international economy and attitudes among businessmen were shifting. In 1561 a system of Industrial Monopoly Licences, similar to modern patents had been introduced into England. But by the reign of Queen Elizabeth I, the system was reputedly much abused and used merely to preserve privileges, encouraging nothing new in the way of innovation or manufacture.[17] When a protest was made in the House of Commons and a Bill was introduced, the Queen convinced the protesters to challenge the case in the courts. This was the catalyst for the Case of Monopolies or Darcy v. Allin.[18] The plaintiff, an officer of the Queen’s household, had been granted the sole right of making playing cards and claimed damages for the defendant’s infringement of this right. The court found the grant void and that three characteristics of monopoly were (1) price increases (2) quality decrease (3) the tendency to reduce artificers to idleness and beggary. This put a temporary end to complaints about monopoly, until King James I began to grant them again. In 1623 Parliament passed the Statute of Monopolies, which for the most part excluded patent rights from its prohibitions, as well as guilds. From King Charles I, through the civil war and to King Charles II, monopolies continued, especially useful for raising revenue.[19] Then in 1684, in East India Company v. Sandys[20] it was decided that exclusive rights to trade only outside the realm were legitimate, on the grounds that only large and powerful concerns could trade in the conditions prevailing overseas. In 1710 to deal with high coal prices caused by a Newcastle Coal Monopoly the New Law was passed.[21] Its provisions stated that “all and every contract or contracts, Covenants and Agreements, whether the same be in writing or not in writing… are hereby declared to be illegal.” When Adam Smith wrote the Wealth of Nations in 1776[22] he was somewhat cynical of the possibility for change.
“To expect indeed that freedom of trade should ever be entirely restored in Great Britain is as absurd as to expect that Oceana or Utopia should ever be established in it. Not only the prejudices of the public, but what is more unconquerable, the private interests of many individuals irresistibly oppose it. The Member of Parliament who supports any proposal for strengthening this Monopoly is seen to acquire not only the reputation for understanding trade, but great popularity and influence with an order of men whose members and wealth render them of great importance.”
[edit] Restraint of trade
Main article: Restraint of trade
Judge Coke in the 17th century thought that general restraints on trade were unreasonable
Judge Coke in the 17th century thought that general restraints on trade were unreasonable
The English law of restraint of trade is the direct predecessor to modern competition law.[23] Its current use is small, given modern and economically oriented statutes in most common law countries. Its approach was based on the two concepts of prohibiting agreements that ran counter to public policy, unless the reasonableness of an agreement could be shown. A restraint of trade is simply some kind of agreed provision that is designed to restrain another’s trade. For example, in Nordenfelt v. Maxim, Nordenfelt Gun Co.[24] a Swedish arm inventor promised on sale of his business to an American gun maker that he “would not make guns or ammunition anywhere in the world, and would not compete with Maxim in any way.”
To be consider whether or not there is a restraint of trade in the first place, both parties must have provided valuable consideration for their agreement. In Dyer’s case[25] a dyer had given a bond not to exercise his trade in the same town as the plaintiff for six months but the plaintiff had promised nothing in return. On hearing the plaintiff’s attempt to enforce this restraint, Hull J exclaimed,
“per Dieu, if the plaintiff were here, he should go to prison until he had paid a fine to the King.”
The common law has evolved to reflect changing business conditions. So in the 1613 case of Rogers v. Parry[26] a court held that a joiner who promised not to trade from his house for 21 years could have this bond enforced against him since the time and place was certain. It was also held that a man cannot bind himself to not use his trade generally by Chief Justice Coke. This was followed in Broad v. Jolyffe[27] and Mitchell v. Reynolds[28] where Lord Macclesfield asked, “What does it signify to a tradesman in London what another does in Newcastle?” In times of such slow communications, commerce around the country it seemed axiomatic that a general restraint served no legitimate purpose for one’s business and ought to be void. But already in 1880 in Roussillon v. Roussillon[29] Lord Justice Fry stated that a restraint unlimited in space need not be void, since the real question was whether it went further than necessary for the promisee’s protection. So in the Nordenfelt[30] case Lord McNaughton ruled that while one could validly promise to “not make guns or ammunition anywhere in the world” it was an unreasonable restraint to “not compete with Maxim in any way.” This approach in England was confirmed by the House of Lords in Mason v. The Provident Supply and Clothing Co.[31]
[edit] Today
Modern competition law begins with the United States legislation of the Sherman Act of 1890 and the Clayton Act of 1914. While other, particularly European, countries also had some form of regulation on monopolies and cartels, the US codification of the common law position on restraint of trade had a widespread effect on subsequent competition law development. Both after World War II and after the fall of the Berlin wall competition law has gone through phases of renewed attention and legislative updates around the world.
[edit] United States antitrust
Main article: United States antitrust law
Modern competition law is modeled on the United States’ Sherman Act, which aimed to “bust the trusts”.
Modern competition law is modeled on the United States’ Sherman Act, which aimed to “bust the trusts”.
The American term anti-trust arose not because the US statutes had anything to do with ordinary trust law, but because the large American corporations used trusts to conceal the nature of their business arrangements. Big trusts became synonymous with big monopolies, the perceived threat to democracy and the free market these trusts represented led to the Sherman and Clayton Acts. These laws, in part, codified past American and English common law of restraints of trade. Senator Hoar, an author of the Sherman Act said in a debate, “We have affirmed the old doctrine of the common law in regard to all inter-state and international commercial transactions and have clothed the United States courts with authority to enforce that doctrine by injunction.” Evidence of the common law basis of the Sherman and Clayton acts is found in the Standard Oil case,[32] where Chief Justice White explicitly linked the Sherman Act with the common law and sixteenth century English statutes on engrossing.[33] The Act’s wording also reflects common law. The first two sections read as follows,
“Section 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine….
Section 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine….”
The Sherman Act did not have the immediate effects its authors intended, though Republican President Theodore Roosevelt’s federal government sued 45 companies, and William Taft used it against 75. The Clayton Act of 1914 was passed to supplement the Sherman Act. Specific categories of abusive conduct were listed, including price discrimination(section 2), exclusive dealings (section 3) and mergers which substantially lessen competition (section 7). Section 6 exempted trade unions from the law’s operation. Both the Sherman and Clayton acts are now codified under Title 15 of the United States Code.
Since the mid-1970s, courts and enforcement officials generally have supported view that antitrust law policy should not follow social and political aims that undermine economic efficiency.[34] The antitrust laws were minimalized in the mid-1980s under influence of Chicago school of economics and blamed for the loss of economic supremacy in the world.[35]
[edit] Development in other countries
This article or section is missing citations or needs footnotes.
Using inline citations helps guard against copyright violations and factual inaccuracies. (July 2008)
See also: Competition regulator
The European Commission, established following World War II, was the first Europe wide competition authority
The European Commission, established following World War II, was the first Europe wide competition authority
It was after the First World War that countries began to follow the United States’ lead in competition policy. In 1923 Canada introduced the Combines Investigation Act and in 1926 France reinforced its basic competition provisions from the 1810 Code Napoleon. After the Second World War, the Allies, led by the United States, introduced tight regulation of cartels and monopolies in occupied Germany and Japan. In Germany, despite the existence of laws against unfair competition passed in 1909 (Gesetz gegen den unlauteren Wettbewerb or UWB) it was widely believed that the predominance of large cartels of German industry had made it easier for the Nazis to assume total economic control, simply by bribing or blackmailing the heads of a small number of industrial magnates. Similarly in Japan, where business was organised along family and nepotistic ties, the zaibatsu were easy for the despotic government to manipulate into the war effort. Following, unconditional surrender tighter controls, replicating American policy were introduced.
Further developments however were considerably overshadowed by the move towards nationalisation and industry wide planning in many countries. Making the economy and industry democratically accountable through direct government action became a priority. Coal industry, railroads, steel, electricity, water, health care and many other sectors were targeted for their special qualities of being natural monopolies. Commonwealth countries were reluctant in enacting statutory competition law provisions. The United Kingdom introduced the (considerably less stringent) Restrictive Practices Act in 1956. Australia introduced its current Trade Practices Act in 1974. Recently however there has been a wave of updates, especially in Europe to harmonise legislation with contemporary competition law thinking.
[edit] European Union law
Main article: European Community competition law
In 1957 six Western European countries signed the Treaty of the European Community (EC Treaty or Treaty of Rome), which over the last fifty years has grown into a European Union of nearly half a billion citizens. The European Community is the name for the economic and social pillar of EU law, under which competition law falls. Healthy competition is seen as an essential element in the creation of a common market free from restraints on trade.[36] The first provision is Article 81 EC, which deals with cartels and restrictive vertical agreements. Prohibited are:
“(1) …all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market…”
Article 81(1) EC then gives examples of “hard core” restrictive practices such as price fixing or market sharing and 81(2) EC confirms that any agreements are automatically void. However, just like the Statute of Monopolies 1623, Article 81(3) EC creates exemptions, if the collusion is for distributional or technological innovation, gives consumers a “fair share” of the benefit and does not include unreasonable restraints (or disproportionate, in ECJ terminology) that risk eliminating competition anywhere. Article 82 EC deals with monopolies, or more precisely firms who have a dominant market share and abuse that position. Unlike U.S. Antitrust, EC law has never been used to punish the existence of dominant firms, but merely imposes a special responsibility to conduct oneself appropriately.[37] Specific categories of abuse listed in Article 82 EC include price discrimination and exclusive dealing, much the same as sections 2 and 3 of the U.S. Clayton Act. Also under Article 82 EC, the European Council was empowered to enact a regulation to control mergers between firms, currently the latest known by the abbreviation of Regulation 139/2004/EC. The general test is whether a concentration (i.e. merger or acquisition) with a community dimension (i.e. affects a number of EU member states) might significantly impede effective competition. Again, the similarity to the Clayton Act’s substantial lessening of competition. Finally, Articles 86 and 87 EC regulate the state’s role in the market. Article 86(2) EC states clearly that nothing in the rules can be used to obstruct a member state’s right to deliver public services, but that otherwise public enterprises must play by the same rules on collusion and abuse of dominance as everyone else. Article 87 EC, similar to Article 81 EC, lays down a general rule that the state may not aid or subsidise private parties in distortion of free competition, but then grants exceptions for things like charities, natural disasters or regional development.
[edit] International enforcement
See also: World Trade Organization and International Competition Network
There is considerable controversy among WTO members, in green, whether competition law should form part of the agreements
There is considerable controversy among WTO members, in green, whether competition law should form part of the agreements
Competition law has already been substantially internationalised along the lines of the US model by nation states themselves, however the involvement of international organisations has been growing. Increasingly active at all international conferences are the United Nations Conference on Trade and Development (UNCTAD) and the Organisation for Economic Co-operation and Development (OECD), which is prone to making neo-liberal recommendations about the total application of competition law for public and private industries.[38] Chapter 5 of the post war Havana Charter contained an Antitrust code[39] but this was never incorporated into the WTO’s forerunner, the General Agreement on Tariffs and Trade 1947. Office of Fair Trading Director and Professor Richard Whish wrote sceptically that it “seems unlikely at the current stage of its development that the WTO will metamorphose into a global competition authority.”[40] Despite that, at the ongoing Doha round of trade talks for the World Trade Organisation, discussion includes the prospect of competition law enforcement moving up to a global level. While it is incapable of enforcement itself, the newly established International Competition Network[41] (ICN) is a way for national authorities to coordinate their own enforcement activities.
It is unclear whether competition policy is a sensible role for government in developing, particularly low-income countries. In these countries the markets are usually very small and fragmented so that developing scale sufficient to raise competitiveness and engage in international markets is a major challenge. The bigger problem is however poor governance - in societies with widespread corruption, inadequate public finances,[42] and weak judiciary and oversight institutions, competition policy may become another tool for capture by vested interests - becoming in itself a barrier to entry.
[edit] Theory
Main article: Competition law theory
[edit] Classical perspective
See also: Classical economics
John Stuart Mill believed the restraint of trade doctrine was justified to preserve liberty and competition
John Stuart Mill believed the restraint of trade doctrine was justified to preserve liberty and competition
The classical perspective on competition was that certain agreements and business practice could be an unreasonable restraint on the individual liberty of tradespeople to carry on their livelihoods. Restraints were judged as permissible or not by courts as new cases appeared and in the light of changing business circumstances. Hence the courts found specific categories of agreement, specific clauses, to fall foul of their doctrine on economic fairness, and they did not contrive an overarching conception of market power. Earlier theorists like Adam Smith rejected any monopoly power on this basis.
“A monopoly granted either to an individual or to a trading company has the same effect as a secret in trade or manufactures. The monopolists, by keeping the market constantly under-stocked, by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emoluments, whether they consist in wages or profit, greatly above their natural rate.”[43]
In The Wealth of Nations (1776) Adam Smith also pointed out the cartel problem, but did not advocate legal measures to combat them.
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”[44]
Smith also rejected the very existence of, not just dominant and abusive corporations, but corporations at all.[45] By the latter half of the nineteenth century it had become clear that large firms had become a fact of the market economy. John Stuart Mill’s approach was laid down in his treatise On Liberty (1859).
“Again, trade is a social act. Whoever undertakes to sell any description of goods to the public, does what affects the interest of other persons, and of society in general; and thus his conduct, in principle, comes within the jurisdiction of society… both the cheapness and the good quality of commodities are most effectually provided for by leaving the producers and sellers perfectly free, under the sole check of equal freedom to the buyers for supplying themselves elsewhere. This is the so-called doctrine of Free Trade, which rests on grounds different from, though equally solid with, the principle of individual liberty asserted in this Essay. Restrictions on trade, or on production for purposes of trade, are indeed restraints; and all restraint, qua restraint, is an evil…”[46]
[edit] Neo-classical synthesis
See also: Neoclassical synthesis
Paul Samuelson, author of the 20th century’s most successful economics text, combined mathematical models and Keynesian macroeconomic intervention. He advocated the general success of the market but backed the American government’s antitrust policies.
Paul Samuelson, author of the 20th century’s most successful economics text, combined mathematical models and Keynesian macroeconomic intervention. He advocated the general success of the market but backed the American government’s antitrust policies.
After Mill, there was a shift in economic theory, which emphasised a more precise and theoretical model of competition. A simple neo-classical model of free markets holds that production and distribution of goods and services in competitive free markets maximizes social welfare. This model assumes that new firms can freely enter markets and compete with existing firms, or to use legal language, there are no barriers to entry. By this term economists mean something very specific, that competitive free markets deliver allocative, productive and dynamic efficiency. Allocative efficiency is also known as Pareto efficiency after the Italian economist Vilfredo Pareto and means that resources in an economy over the long run will go precisely to those who are willing and able to pay for them. Because rational producers will keep producing and selling, and buyers will keep buying up to the last marginal unit of possible output - or alternatively rational producers will be reduce their output to the margin at which buyers will buy the same amount as produced - there is no waste, the greatest number wants of the greatest number of people become satisfied and utility is perfected because resources can no longer be reallocated to make anyone better off without making someone else worse off; society has achieved allocative efficiency. Productive efficiency simply means that society is making as much as it can. Free markets are meant to reward those who work hard, and therefore those who will put society’s resources towards the frontier of its possible production.[47] Dynamic efficiency refers to the idea that business which constantly competes must research, create and innovate to keep its share of consumers. This traces to Austrian-American political scientist Joseph Schumpeter’s notion that a “perennial gale of creative destruction” is ever sweeping through capitalist economies, driving enterprise at the market’s mercy.[48] This led Schumpeter to argue that monopolies did not need to be broken up (as with Standard Oil) because the next gale of economic innovation would do the same.
Contrasting with the allocatively, productively and dynamically efficient market model are monopolies, oligopolies, and cartels. When only one or a few firms exist in the market, and there is no credible threat of the entry of competing firms, prices raise above the competitive level, to either a monopolistic or oligopolistic equilibrium price. Production is also decreased, further decreasing social welfare by creating a deadweight loss. Sources of this market power are said to include the existence of externalities, barriers to entry of the market, and the free rider problem. Markets may fail to be efficient for a variety of reasons, so the exception of competition law’s intervention to the rule of laissez faire is justified if government failure can be avoided. Orthodox economists fully acknowledge that perfect competition is seldom observed in the real world, and so aim for what is called “workable competition”.[49][50] This follows the theory that if one cannot achieve the ideal, then go for the second best option[51] by using the law to tame market operation where it can.
[edit] Chicago School
Robert Bork argues that competition law is fundamentally flawed
Robert Bork argues that competition law is fundamentally flawed
See also: Chicago School (economics) and Neoclassical economics
A group of economists and lawyers, who are largely associated with the University of Chicago, advocate an approach to competition law guided by the proposition that some actions that were originally considered to be anticompetitive could actually promote competition.[52] The U.S. Supreme Court has used the Chicago School approach in several recent cases.[53] One view of the Chicago School approach to antitrust is found in United States Circuit Court of Appeals Judge Richard Posner’s books’ Antitrust Law[54] and Economic Analysis of Law[55]
Robert Bork was highly critical of court decisions on United States antitrust law in a series of law review articles and his book The Antitrust Paradox.[56] Bork argued that both the original intention of antitrust laws and economic efficiency was the pursuit only of consumer welfare, the protection of competition rather than competitors.[57] Furthermore, only a few acts should be prohibited, namely cartels that fix prices and divide markets, mergers that create monopolies, and dominant firms pricing predatorily, while allowing such practices as vertical agreements and price discrimination on the grounds that it did not harm consumers.[58] Running through the different critiques of US antitrust policy is the common theme that government interference in the operation of free markets does more harm than good.[59] “The only cure for bad theory”, writes Bork, “is better theory”.[57] The late Harvard Law School Professor Philip Areeda, who favours more aggressive antitrust policy, in at least one Supreme Court case challenged Robert Bork’s preference for non-intervention.[60]
[edit] Policy developments
Anti-cartel enforcement is a key focus of competition law enforcement policy. In the US the Antitrust Criminal Penalty Enhancement and Reform Act 2004 raised the maximum imprisonment term for price fixing from three to ten years, and the maximum fine from $10 to $100 million.[61] In 2007 British Airways and Korean Air pleaded guilty to fixing cargo and passenger flight prices.[62]
These actions complement the private enforcement which has always been an important feature of United States antitrust law. The United States Supreme Court summarised why Congress allows punitive damages in Hawaii v. Standard Oil Co. of Cal.:[63]
“ Every violation of the antitrust laws is a blow to the free-enterprise system envisaged by Congress. This system depends on strong competition for its health and vigor, and strong competition depends, in turn, on compliance with antitrust legislation. In enacting these laws, Congress had many means at its disposal to penalize violators. It could have, for example, required violators to compensate federal, state, and local governments for the estimated damage to their respective economies caused by the violations. But, this remedy was not selected. Instead, Congress chose to permit all persons to sue to recover three times their actual damages every time they were injured in their business or property by an antitrust violation. ”
In the EU, the Modernisation Regulation 1/2003 means that the European Commission is no longer the only body capable of public enforcement of European Community competition law. This was done in order to facilitate quicker resolution of competition-related inquiries. In 2005 the Commission issued a Green Paper on Damages actions for the breach of the EC antitrust rules,[64] which suggested ways of making private damages claims against cartels easier.[65]
[edit] Practice
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[edit] Collusion and cartels
Main articles: Collusion and Cartel
Scottish Enlightenment philosopher Adam Smith was an early enemy of cartels
Scottish Enlightenment philosopher Adam Smith was an early enemy of cartels
The core of competition policy has, since the 1980s, been the anti-price fixing cartel agenda, despite criticism by libertarians.[66] In The Wealth of Nations (1776) Adam Smith pointed out the cartel problem, but did not advocate legal measures to combat them.[67] Nowadays a far stricter approach is taken. Under EC law cartels are banned by Article 81 EC, whereas under US law the Sherman Act prohibitions of section 1. To compare, the target of competition law under the Sherman Act 1890 is every “contract, combination in the form of trust or otherwise, or conspiracy”, which essentially targets anybody who has some dealing or contact with someone else. In the mean time, Art. 81 EC makes clear who the targets of competition law are in two stages with the term agreement “undertaking”. This is used to describe almost anyone “engaged in an economic activity”,[68] but excludes both employees, who are by their “very nature the opposite of the independent exercise of an economic or commercial activity”,[69] and public services based on “solidarity” for a “social purpose”.[70] Undertakings must then have formed an agreement, developed a “concerted practice”, or, within an association, taken a decision. Like US antitrust, this just means all the same thing;[71] any kind of dealing or contact, or a “meeting of the minds” between parties. Covered therefore is a whole range from a strong handshaken written or verbal agreement to a supplier sending invoices with directions not to export to its retailer who gives “tacit acquiescence” to the conduct.[72]
Less of a consensus exists in the field of vertical agreements. These are agreements not between firms at the same level of production, but firms at different levels in the supply chain, for instance a supermarket and a bread producer. Recently, the United States Supreme Court has become more skeptical of antitrust cases predicated on agreements between companies that are not directly in competition with one another, such as a clothing manufacturer and a clothing retailer, while maintaining the strict prohibition against agreements that limit competition between companies at the same level of the supply chain, such as agreements between two retailers or between two distributors. Vertical agreements may still be illegal, but the burden of proving them illegal was raised by a number of recent cases from the per se illegal standard to a more demanding rule of reason standard.[73]
[edit] Dominance and monopoly
Main article: Monopoly law
The economist’s depiction of deadweight loss to efficiency that monopolies cause
The economist’s depiction of deadweight loss to efficiency that monopolies cause
When firms hold large market shares, consumers risk paying higher prices and getting lower quality products than compared to competitive markets. However, the existence of a very high market share does not always mean consumers are paying excessive prices since the threat of new entrants to the market can restrain a high-market-share firm’s price increases. Competition law does not make merely having a monopoly illegal, but rather abusing the power that a monopoly may confer, for instance through exclusionary practices.
First it is necessary to determine whether a firm is dominant, or whether it behaves “to an appreciable extent independently of its competitors, customers and ultimately of its consumer.”[74] Under EU law, very large market shares raise a presumption that a firm is dominant,[75] which may be rebuttable.[76] If a firm has a dominant position, then there is “a special responsibility not to allow its conduct to impair competition on the common market”.[77] Similarly as with collusive conduct, market shares are determined with reference to the particular market in which the firm and product in question is sold. Then although the lists are seldom closed,[78] certain categories of abusive conduct are usually prohibited under the country’s legislation. For instance, limiting production at a shipping port by refusing to raise expenditure and update technology could be abusive.[79] Tying one product into the sale of another can be considered abuse too, being restrictive of consumer choice and depriving competitors of outlets. This was the alleged case in Microsoft v. Commission[80] leading to an eventual fine of €497 million for including its Windows Media Player with the Microsoft Windows platform. A refusal to supply a facility which is essential for all businesses attempting to compete to use can constitute an abuse. One example was in a case involving a medical company named Commercial Solvents.[81] When it set up its own rival in the tuberculosis drugs market, Commercial Solvents were forced to continue supplying a company named Zoja with the raw materials for the drug. Zoja was the only market competitor, so without the court forcing supply, all competition would have been eliminated.
Forms of abuse relating directly to pricing include price exploitation. It is difficult to prove at what point a dominant firm’s prices become “exploitative” and this category of abuse is rarely found. In one case however, a French funeral service was found to have demanded exploitative prices, and this was justified on the basis that prices of funeral services outside the region could be compared.[82] A more tricky issue is predatory pricing. This is the practice of dropping prices of a product so much that in order one’s smaller competitors cannot cover their costs and fall out of business. The Chicago School (economics) considers predatory pricing to be unlikely.[83] However in France Telecom SA v. Commission[84] a broadband internet company was forced to pay €10.35 million for dropping its prices below its own production costs. It had “no interest in applying such prices except that of eliminating competitors”[85] and was being crossed subsidised to capture the lion’s share of a booming market. One last category of pricing abuse is price discrimination.[86] An example of this could be offering rebates to industrial customers who export your company’s sugar, but not to Irish customers who are selling their goods in the same market as you are in.[87]
See also: Dominance (economics) and Monopoly
[edit] Mergers and acquisitions
Main article: Mergers and acquisitions
A merger or acquisition involves, from a competition law perspective, the concentration of economic power in the hands of fewer than before.[88] This usually means that one firm buys out the shares of another. The reasons for oversight of economic concentrations by the state are the same as the reasons to restrict firms who abuse a position of dominance, only that regulation of mergers and acquisitions attempts to deal with the problem before it arises, ex ante prevention of creating dominant firms.[89] In the United States merger regulation began under the Clayton Act, and in the European Union, under the Merger Regulation 139/2004 (known as the “ECMR”[90]). Competition law requires that firms proposing to merge gain authorisation from the relevant government authority, or simply go ahead but face the prospect of demerger should the concentration later be found to lessen competition. The theory behind mergers is that transaction costs can be reduced compared to operating on an open market through bilateral contracts.[91] Concentrations can increase economies of scale and scope. However often firms take advantage of their increase in market power, their increased market share and decreased number of competitors, which can have a knock on effect on the deal that consumers get. Merger control is about predicting what the market might be like, not knowing and making a judgment. Hence the central provision under EU law asks whether a concentration would if it went ahead “significantly impede effective competition… in particular as a result of the creation or strengthening off a dominant position…”[92] and the corresponding provision under US antitrust states similarly,
“No person shall acquire, directly or indirectly, the whole or any part of the stock or other share capital… of the assets of one or more persons engaged in commerce or in any activity affecting commerce, where… the effect of such acquisition, of such stocks or assets, or of the use of such stock by the voting or granting of proxies or otherwise, may be substantially to lessen competition, or to tend to create a monopoly.[93]
What amounts to a substantial lessening of, or significant impediment to competition is usually answered through empirical study. The market shares of the merging companies can be assessed and added, although this kind of analysis only gives rise to presumptions, not conclusions.[94] Something called the Herfindahl-Hirschman Index is used to calculate the “density” of the market, or what concentration exists. Aside from the maths, it is important to consider the product in question and the rate of technical innovation in the market.[95] A further problem of collective dominance, or oligopoly through “economic links”[96] can arise, whereby the new market becomes more conducive to collusion. It is relevant how transparent a market is, because a more concentrated structure could mean firms can coordinate their behaviour more easily, whether firms can deploy deterrants and whether firms are safe from a reaction by their competitors and consumers.[97] The entry of new firms to the market, and any barriers that they might encounter should be considered.[98] If firms are shown to be creating an uncompetitive concentration, in the US they can still argue that they create efficiencies enough to outweigh any detriment, and similar reference to “technical and economic progress” is mentioned in Art. 2 of the ECMR.[99] Another defence might be that a firm which is being taken over is about to fail or go insolvent, and taking it over leaves a no less competitive state than what would happen anyway.[100] Mergers vertically in the market are rarely of concern, although in AOL/Time Warner[101] the European Commission required that a joint venture with a competitor Bertelsmann be ceased beforehand. The EU authorities have also focussed lately on the effect of conglomerate mergers, where companies acquire a large portfolio of related products, though without necessarily dominant shares in any individual market.[102]
[edit] Public sector regulation
Main articles: Public services, Regulated market, and EC regulation
See also: American Telephone & Telegraph, Kingsbury Commitment, Hush-a-Phone v. FCC, and Bell System divestiture
Public sector industries, or industries which are by their nature providing a public service, are involved in competition law in many ways similar to private companies. Under EC law, Articles 86 and 87 create exceptions for the assured achievement of public sector service provision. Many industries, such as railways, telecommunications, electricity, gas, water and media have their own independent sector regulators. These government agencies are charged with ensuring that private providers carry out certain public service duties in line of social welfare goals. For instance, an electricity company may not be allowed to disconnect someone’s supply merely because they have not paid their bills up to date, because that could leave a person in the dark and cold just because they are poor. Instead the electricity company would have to give the person a number of warnings and offer assistance until government welfare support kicks in.[103]
September 17th, 2008 at 3:17 am
So why does this website waste it’s time posting trivel like this ? first of all everybody knows that the US congress and the US goverment is corrupt to the bone and they take kickbacks and bribes from the entertainment cartels.
It is NEVER going to change.
.The US goverment supports all kinds of obsolete business models such as silly(civil sevice) tax supported military exchange retail outlets that are badly managed and don’t make a profit and private business contractors that generally rip of the federal goverment.
The US congress supports billions of dollars worth of useless pork barrel spending.
The federal goverment has always propped up failing businesses for bad business practices or other wise providing corporate welfare (PROTECTIONISM)for other failing american businesses other than the entertainment cartels.
If i think about the business practices of the movie and recording industry i think of ANTITRUST SUIT……………
GET OVER IT……………THINGS ARE NEVER GOING TO CHANGE.
DON’T BUY THIER PRODUCTS AND WHY DON’T YOU QUIT YOUR CRYING ………………………
Competition law
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“Antitrust” redirects here. For the 2001 film, see Antitrust (film). For laws specific to the U.S., see United States antitrust law.
Competition law, known in the United States as antitrust law, has three main elements:
* prohibiting agreements or practices that restrict free trading and competition between business entities. This includes in particular the repression of cartels.
* banning abusive behaviour by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position. Practices controlled in this way may include predatory pricing, tying, price gouging, refusal to deal, and many others.
* supervising the mergers and acquisitions of large corporations, including some joint ventures. Transactions that are considered to threaten the competitive process can be prohibited altogether, or approved subject to “remedies” such as an obligation to divest part of the merged business or to offer licences or access to facilities to enable other businesses to continue competing.
The substance and produce of competition Act vary from jurisdiction to jurisdiction. Protecting the interests of consumers (consumer welfare) and ensuring that entrepreneurs have an opportunity to compete in the market economy are often treated as important objectives. Competition law is closely connected with law on deregulation of access to markets, state aids and subsidies, the privatisation of state owned assets and the establishment of independent sector regulators. In recent decades, competition law has been viewed as a way to provide better public services.[1] Robert Bork has found that competition laws can produce adverse effects when they reduce competition by protecting inefficient competitors and when costs of legal intervention are greater then benefits for the consumers.[2] The history of competition law reaches back to the Roman Empire. The business practices of market traders, guilds and governments have always been subject to scrutiny, and sometimes severe sanctions. Since the twentieth century, competition law has become global. The two largest and most influential systems of competition regulation are United States antitrust law and European Community competition law. National and regional competition authorities across the world have formed international support and enforcement networks.
Contents
[hide]
* 1 History
o 1.1 Roman legislation
o 1.2 Middle ages
o 1.3 Renaissance developments
o 1.4 Restraint of trade
* 2 Today
o 2.1 United States antitrust
o 2.2 Development in other countries
o 2.3 European Union law
o 2.4 International enforcement
* 3 Theory
o 3.1 Classical perspective
o 3.2 Neo-classical synthesis
o 3.3 Chicago School
o 3.4 Policy developments
* 4 Practice
o 4.1 Collusion and cartels
o 4.2 Dominance and monopoly
o 4.3 Mergers and acquisitions
o 4.4 Public sector regulation
* 5 See also
* 6 Notes
* 7 References
* 8 Further reading
* 9 External links
[edit] History
Competition law
Basic concepts
* History of competition law
* Monopolization
o Coercive monopoly
o Natural monopoly
* Barriers to entry
* Market power
* SSNIP test
* Relevant market
* Merger control
Anti-competitive practices
* Collusion
o Formation of cartels
o Price fixing
o Bid rigging
* Product bundling and tying
* Refusal to deal
o Group boycott
* Exclusive dealing
* Dividing territories
* Conscious parallelism
* Predatory pricing
* Misuse of patents and copyrights
Laws and doctrines
United States
* Sherman Antitrust Act
* Clayton Antitrust Act
* Robinson-Patman Act
* FTC Act
* Hart-Scott-Rodino Act
* Merger guidelines
* Essential facilities doctrine
* Noerr-Pennington doctrine
* Rule of reason
Europe
* European Community
competition law
* Irish Competition Law
* Competition Act 1998 (UK)
Australia
* Trade Practices Act 1974
Enforcement authorities and organizations
* International Competition Network
* List of competition regulators
edit box
Main article: History of competition law
Laws governing competition law are found in over two millennia of history. Roman Emperors and Medieval monarchs alike used tariffs to stabilize prices or support local production. The formal study of “competition”, began in earnest during the 18th century with such works as Adam Smith’s The Wealth of Nations. Different terms were used to describe this area of the law, including “restrictive practices”, “the law of monopolies”, “combination acts” and the “restraint of trade”.
[edit] Roman legislation
See also: Roman law
An early example of competition law is the Lex Julia de Annona, enacted during the Roman Republic around 50 BC.[3] To protect the grain trade, heavy fines were imposed on anyone directly, deliberately and insidiously stopping supply ships.[4] Under Diocletian in 301 AD an edict imposed the death penalty for anyone violating a tariff system, for example by buying up, concealing or contriving the scarcity of everyday goods.[5]
More legislation came under the Constitution of Zeno of 483 AD, which can be traced into Florentine Municipal laws of 1322 and 1325.[6] This provided for confiscation of property and banishment for any trade combinations or joint action of monopolies private or granted by the Emperor. Zeno rescinded all previously granted exclusive rights.[7] Justinian I subsequently introduced legislation to pay officials to manage state monopolies.[8] As Europe slipped into the dark ages, so did the records of law making until the Middle Ages brought greater expansion of trade in the time of lex mercatoria.
[edit] Middle ages
See also: Lex Mercatoria and Guilds
Edward III during the Black Death enacted the Statute of Labourers to cap wages, and provide double damages against infringers
Edward III during the Black Death enacted the Statute of Labourers to cap wages, and provide double damages against infringers
Legislation in England to control monopolies and restrictive practices were in force well before the Norman Conquest.[9] The Domesday Book recorded that “foresteel” (i.e. forestalling, the practice of buying up goods before they reach market and then inflating the prices) was one of three forfeitures that King Edward the Confessor could carry out through England.[10] But concern for fair prices also led to attempts to directly regulate the market. Under Henry III an act was passed in 1266[11] to fix bread and ale prices in correspondence with corn prices laid down by the assizes. Penalties for breach included amercements, pillory and tumbrel.[12] A fourteenth century statute labelled forestallers as “oppressors of the poor and the community at large and enemies of the whole country.”[13] Under King Edward III the Statute of Labourers of 1349[14] fixed wages of artificers and workmen and decreed that foodstuffs should be sold at reasonable prices. On top of existing penalties, the statute stated that overcharging merchants must pay the injured party double the sum he received, an idea that has been replicated in punitive treble damages under US antitrust law. Also under Edward III, the following statutory provision outlawed trade combinations.[15]
“…we have ordained and established, that no merchant or other shall make Confederacy, Conspiracy, Coin, Imagination, or Murmur, or Evil Device in any point that may turn to the Impeachment, Disturbance, Defeating or Decay of the said Staples, or of anything that to them pertaineth, or may pertain.”
Examples of legislation in mainland Europe include the constitutiones juris metallici by Wenceslas II of Bohemia between 1283 and 1305, condemning combinations of ore traders increasing prices; the Municipal Statutes of Florence in 1322 and 1325 followed Zeno’s legislation against state monopolies; and under Emperor Charles V in the Holy Roman Empire a law was passed “to prevent losses resulting from monopolies and improper contracts which many merchants and artisans made in the Netherlands.” In 1553 King Henry VIII reintroduced tariffs for foodstuffs, designed to stabilise prices, in the face of fluctuations in supply from overseas. So the legislation read here that whereas,
“it is very hard and difficult to put certain prices to any such things… [it is necessary because] prices of such victuals be many times enhanced and raised by the Greedy Covetousness and Appetites of the Owners of such Victuals, by occasion of ingrossing and regrating the same, more than upon any reasonable or just ground or cause, to the great damage and impoverishing of the King’s subjects.”[16]
Around this time organisations representing various tradesmen and handicraftspeople, known as guilds had been developing, and enjoyed many concessions and exemptions from the laws against monopolies. The privileges conferred were not abolished until the Municipal Corporations Act 1835.
[edit] Renaissance developments
See also: Renaissance
Elizabeth I assured monopolies would not be abused in the early era of globalisation
Elizabeth I assured monopolies would not be abused in the early era of globalisation
Europe around the 15th century was changing quickly. The new world had just been opened up, overseas trade and plunder was pouring wealth through the international economy and attitudes among businessmen were shifting. In 1561 a system of Industrial Monopoly Licences, similar to modern patents had been introduced into England. But by the reign of Queen Elizabeth I, the system was reputedly much abused and used merely to preserve privileges, encouraging nothing new in the way of innovation or manufacture.[17] When a protest was made in the House of Commons and a Bill was introduced, the Queen convinced the protesters to challenge the case in the courts. This was the catalyst for the Case of Monopolies or Darcy v. Allin.[18] The plaintiff, an officer of the Queen’s household, had been granted the sole right of making playing cards and claimed damages for the defendant’s infringement of this right. The court found the grant void and that three characteristics of monopoly were (1) price increases (2) quality decrease (3) the tendency to reduce artificers to idleness and beggary. This put a temporary end to complaints about monopoly, until King James I began to grant them again. In 1623 Parliament passed the Statute of Monopolies, which for the most part excluded patent rights from its prohibitions, as well as guilds. From King Charles I, through the civil war and to King Charles II, monopolies continued, especially useful for raising revenue.[19] Then in 1684, in East India Company v. Sandys[20] it was decided that exclusive rights to trade only outside the realm were legitimate, on the grounds that only large and powerful concerns could trade in the conditions prevailing overseas. In 1710 to deal with high coal prices caused by a Newcastle Coal Monopoly the New Law was passed.[21] Its provisions stated that “all and every contract or contracts, Covenants and Agreements, whether the same be in writing or not in writing… are hereby declared to be illegal.” When Adam Smith wrote the Wealth of Nations in 1776[22] he was somewhat cynical of the possibility for change.
“To expect indeed that freedom of trade should ever be entirely restored in Great Britain is as absurd as to expect that Oceana or Utopia should ever be established in it. Not only the prejudices of the public, but what is more unconquerable, the private interests of many individuals irresistibly oppose it. The Member of Parliament who supports any proposal for strengthening this Monopoly is seen to acquire not only the reputation for understanding trade, but great popularity and influence with an order of men whose members and wealth render them of great importance.”
[edit] Restraint of trade
Main article: Restraint of trade
Judge Coke in the 17th century thought that general restraints on trade were unreasonable
Judge Coke in the 17th century thought that general restraints on trade were unreasonable
The English law of restraint of trade is the direct predecessor to modern competition law.[23] Its current use is small, given modern and economically oriented statutes in most common law countries. Its approach was based on the two concepts of prohibiting agreements that ran counter to public policy, unless the reasonableness of an agreement could be shown. A restraint of trade is simply some kind of agreed provision that is designed to restrain another’s trade. For example, in Nordenfelt v. Maxim, Nordenfelt Gun Co.[24] a Swedish arm inventor promised on sale of his business to an American gun maker that he “would not make guns or ammunition anywhere in the world, and would not compete with Maxim in any way.”
To be consider whether or not there is a restraint of trade in the first place, both parties must have provided valuable consideration for their agreement. In Dyer’s case[25] a dyer had given a bond not to exercise his trade in the same town as the plaintiff for six months but the plaintiff had promised nothing in return. On hearing the plaintiff’s attempt to enforce this restraint, Hull J exclaimed,
“per Dieu, if the plaintiff were here, he should go to prison until he had paid a fine to the King.”
The common law has evolved to reflect changing business conditions. So in the 1613 case of Rogers v. Parry[26] a court held that a joiner who promised not to trade from his house for 21 years could have this bond enforced against him since the time and place was certain. It was also held that a man cannot bind himself to not use his trade generally by Chief Justice Coke. This was followed in Broad v. Jolyffe[27] and Mitchell v. Reynolds[28] where Lord Macclesfield asked, “What does it signify to a tradesman in London what another does in Newcastle?” In times of such slow communications, commerce around the country it seemed axiomatic that a general restraint served no legitimate purpose for one’s business and ought to be void. But already in 1880 in Roussillon v. Roussillon[29] Lord Justice Fry stated that a restraint unlimited in space need not be void, since the real question was whether it went further than necessary for the promisee’s protection. So in the Nordenfelt[30] case Lord McNaughton ruled that while one could validly promise to “not make guns or ammunition anywhere in the world” it was an unreasonable restraint to “not compete with Maxim in any way.” This approach in England was confirmed by the House of Lords in Mason v. The Provident Supply and Clothing Co.[31]
[edit] Today
Modern competition law begins with the United States legislation of the Sherman Act of 1890 and the Clayton Act of 1914. While other, particularly European, countries also had some form of regulation on monopolies and cartels, the US codification of the common law position on restraint of trade had a widespread effect on subsequent competition law development. Both after World War II and after the fall of the Berlin wall competition law has gone through phases of renewed attention and legislative updates around the world.
[edit] United States antitrust
Main article: United States antitrust law
Modern competition law is modeled on the United States’ Sherman Act, which aimed to “bust the trusts”.
Modern competition law is modeled on the United States’ Sherman Act, which aimed to “bust the trusts”.
The American term anti-trust arose not because the US statutes had anything to do with ordinary trust law, but because the large American corporations used trusts to conceal the nature of their business arrangements. Big trusts became synonymous with big monopolies, the perceived threat to democracy and the free market these trusts represented led to the Sherman and Clayton Acts. These laws, in part, codified past American and English common law of restraints of trade. Senator Hoar, an author of the Sherman Act said in a debate, “We have affirmed the old doctrine of the common law in regard to all inter-state and international commercial transactions and have clothed the United States courts with authority to enforce that doctrine by injunction.” Evidence of the common law basis of the Sherman and Clayton acts is found in the Standard Oil case,[32] where Chief Justice White explicitly linked the Sherman Act with the common law and sixteenth century English statutes on engrossing.[33] The Act’s wording also reflects common law. The first two sections read as follows,
“Section 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine….
Section 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine….”
The Sherman Act did not have the immediate effects its authors intended, though Republican President Theodore Roosevelt’s federal government sued 45 companies, and William Taft used it against 75. The Clayton Act of 1914 was passed to supplement the Sherman Act. Specific categories of abusive conduct were listed, including price discrimination(section 2), exclusive dealings (section 3) and mergers which substantially lessen competition (section 7). Section 6 exempted trade unions from the law’s operation. Both the Sherman and Clayton acts are now codified under Title 15 of the United States Code.
Since the mid-1970s, courts and enforcement officials generally have supported view that antitrust law policy should not follow social and political aims that undermine economic efficiency.[34] The antitrust laws were minimalized in the mid-1980s under influence of Chicago school of economics and blamed for the loss of economic supremacy in the world.[35]
[edit] Development in other countries
This article or section is missing citations or needs footnotes.
Using inline citations helps guard against copyright violations and factual inaccuracies. (July 2008)
See also: Competition regulator
The European Commission, established following World War II, was the first Europe wide competition authority
The European Commission, established following World War II, was the first Europe wide competition authority
It was after the First World War that countries began to follow the United States’ lead in competition policy. In 1923 Canada introduced the Combines Investigation Act and in 1926 France reinforced its basic competition provisions from the 1810 Code Napoleon. After the Second World War, the Allies, led by the United States, introduced tight regulation of cartels and monopolies in occupied Germany and Japan. In Germany, despite the existence of laws against unfair competition passed in 1909 (Gesetz gegen den unlauteren Wettbewerb or UWB) it was widely believed that the predominance of large cartels of German industry had made it easier for the Nazis to assume total economic control, simply by bribing or blackmailing the heads of a small number of industrial magnates. Similarly in Japan, where business was organised along family and nepotistic ties, the zaibatsu were easy for the despotic government to manipulate into the war effort. Following, unconditional surrender tighter controls, replicating American policy were introduced.
Further developments however were considerably overshadowed by the move towards nationalisation and industry wide planning in many countries. Making the economy and industry democratically accountable through direct government action became a priority. Coal industry, railroads, steel, electricity, water, health care and many other sectors were targeted for their special qualities of being natural monopolies. Commonwealth countries were reluctant in enacting statutory competition law provisions. The United Kingdom introduced the (considerably less stringent) Restrictive Practices Act in 1956. Australia introduced its current Trade Practices Act in 1974. Recently however there has been a wave of updates, especially in Europe to harmonise legislation with contemporary competition law thinking.
[edit] European Union law
Main article: European Community competition law
In 1957 six Western European countries signed the Treaty of the European Community (EC Treaty or Treaty of Rome), which over the last fifty years has grown into a European Union of nearly half a billion citizens. The European Community is the name for the economic and social pillar of EU law, under which competition law falls. Healthy competition is seen as an essential element in the creation of a common market free from restraints on trade.[36] The first provision is Article 81 EC, which deals with cartels and restrictive vertical agreements. Prohibited are:
“(1) …all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market…”
Article 81(1) EC then gives examples of “hard core” restrictive practices such as price fixing or market sharing and 81(2) EC confirms that any agreements are automatically void. However, just like the Statute of Monopolies 1623, Article 81(3) EC creates exemptions, if the collusion is for distributional or technological innovation, gives consumers a “fair share” of the benefit and does not include unreasonable restraints (or disproportionate, in ECJ terminology) that risk eliminating competition anywhere. Article 82 EC deals with monopolies, or more precisely firms who have a dominant market share and abuse that position. Unlike U.S. Antitrust, EC law has never been used to punish the existence of dominant firms, but merely imposes a special responsibility to conduct oneself appropriately.[37] Specific categories of abuse listed in Article 82 EC include price discrimination and exclusive dealing, much the same as sections 2 and 3 of the U.S. Clayton Act. Also under Article 82 EC, the European Council was empowered to enact a regulation to control mergers between firms, currently the latest known by the abbreviation of Regulation 139/2004/EC. The general test is whether a concentration (i.e. merger or acquisition) with a community dimension (i.e. affects a number of EU member states) might significantly impede effective competition. Again, the similarity to the Clayton Act’s substantial lessening of competition. Finally, Articles 86 and 87 EC regulate the state’s role in the market. Article 86(2) EC states clearly that nothing in the rules can be used to obstruct a member state’s right to deliver public services, but that otherwise public enterprises must play by the same rules on collusion and abuse of dominance as everyone else. Article 87 EC, similar to Article 81 EC, lays down a general rule that the state may not aid or subsidise private parties in distortion of free competition, but then grants exceptions for things like charities, natural disasters or regional development.
[edit] International enforcement
See also: World Trade Organization and International Competition Network
There is considerable controversy among WTO members, in green, whether competition law should form part of the agreements
There is considerable controversy among WTO members, in green, whether competition law should form part of the agreements
Competition law has already been substantially internationalised along the lines of the US model by nation states themselves, however the involvement of international organisations has been growing. Increasingly active at all international conferences are the United Nations Conference on Trade and Development (UNCTAD) and the Organisation for Economic Co-operation and Development (OECD), which is prone to making neo-liberal recommendations about the total application of competition law for public and private industries.[38] Chapter 5 of the post war Havana Charter contained an Antitrust code[39] but this was never incorporated into the WTO’s forerunner, the General Agreement on Tariffs and Trade 1947. Office of Fair Trading Director and Professor Richard Whish wrote sceptically that it “seems unlikely at the current stage of its development that the WTO will metamorphose into a global competition authority.”[40] Despite that, at the ongoing Doha round of trade talks for the World Trade Organisation, discussion includes the prospect of competition law enforcement moving up to a global level. While it is incapable of enforcement itself, the newly established International Competition Network[41] (ICN) is a way for national authorities to coordinate their own enforcement activities.
It is unclear whether competition policy is a sensible role for government in developing, particularly low-income countries. In these countries the markets are usually very small and fragmented so that developing scale sufficient to raise competitiveness and engage in international markets is a major challenge. The bigger problem is however poor governance - in societies with widespread corruption, inadequate public finances,[42] and weak judiciary and oversight institutions, competition policy may become another tool for capture by vested interests - becoming in itself a barrier to entry.
[edit] Theory
Main article: Competition law theory
[edit] Classical perspective
See also: Classical economics
John Stuart Mill believed the restraint of trade doctrine was justified to preserve liberty and competition
John Stuart Mill believed the restraint of trade doctrine was justified to preserve liberty and competition
The classical perspective on competition was that certain agreements and business practice could be an unreasonable restraint on the individual liberty of tradespeople to carry on their livelihoods. Restraints were judged as permissible or not by courts as new cases appeared and in the light of changing business circumstances. Hence the courts found specific categories of agreement, specific clauses, to fall foul of their doctrine on economic fairness, and they did not contrive an overarching conception of market power. Earlier theorists like Adam Smith rejected any monopoly power on this basis.
“A monopoly granted either to an individual or to a trading company has the same effect as a secret in trade or manufactures. The monopolists, by keeping the market constantly under-stocked, by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emoluments, whether they consist in wages or profit, greatly above their natural rate.”[43]
In The Wealth of Nations (1776) Adam Smith also pointed out the cartel problem, but did not advocate legal measures to combat them.
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”[44]
Smith also rejected the very existence of, not just dominant and abusive corporations, but corporations at all.[45] By the latter half of the nineteenth century it had become clear that large firms had become a fact of the market economy. John Stuart Mill’s approach was laid down in his treatise On Liberty (1859).
“Again, trade is a social act. Whoever undertakes to sell any description of goods to the public, does what affects the interest of other persons, and of society in general; and thus his conduct, in principle, comes within the jurisdiction of society… both the cheapness and the good quality of commodities are most effectually provided for by leaving the producers and sellers perfectly free, under the sole check of equal freedom to the buyers for supplying themselves elsewhere. This is the so-called doctrine of Free Trade, which rests on grounds different from, though equally solid with, the principle of individual liberty asserted in this Essay. Restrictions on trade, or on production for purposes of trade, are indeed restraints; and all restraint, qua restraint, is an evil…”[46]
[edit] Neo-classical synthesis
See also: Neoclassical synthesis
Paul Samuelson, author of the 20th century’s most successful economics text, combined mathematical models and Keynesian macroeconomic intervention. He advocated the general success of the market but backed the American government’s antitrust policies.
Paul Samuelson, author of the 20th century’s most successful economics text, combined mathematical models and Keynesian macroeconomic intervention. He advocated the general success of the market but backed the American government’s antitrust policies.
After Mill, there was a shift in economic theory, which emphasised a more precise and theoretical model of competition. A simple neo-classical model of free markets holds that production and distribution of goods and services in competitive free markets maximizes social welfare. This model assumes that new firms can freely enter markets and compete with existing firms, or to use legal language, there are no barriers to entry. By this term economists mean something very specific, that competitive free markets deliver allocative, productive and dynamic efficiency. Allocative efficiency is also known as Pareto efficiency after the Italian economist Vilfredo Pareto and means that resources in an economy over the long run will go precisely to those who are willing and able to pay for them. Because rational producers will keep producing and selling, and buyers will keep buying up to the last marginal unit of possible output - or alternatively rational producers will be reduce their output to the margin at which buyers will buy the same amount as produced - there is no waste, the greatest number wants of the greatest number of people become satisfied and utility is perfected because resources can no longer be reallocated to make anyone better off without making someone else worse off; society has achieved allocative efficiency. Productive efficiency simply means that society is making as much as it can. Free markets are meant to reward those who work hard, and therefore those who will put society’s resources towards the frontier of its possible production.[47] Dynamic efficiency refers to the idea that business which constantly competes must research, create and innovate to keep its share of consumers. This traces to Austrian-American political scientist Joseph Schumpeter’s notion that a “perennial gale of creative destruction” is ever sweeping through capitalist economies, driving enterprise at the market’s mercy.[48] This led Schumpeter to argue that monopolies did not need to be broken up (as with Standard Oil) because the next gale of economic innovation would do the same.
Contrasting with the allocatively, productively and dynamically efficient market model are monopolies, oligopolies, and cartels. When only one or a few firms exist in the market, and there is no credible threat of the entry of competing firms, prices raise above the competitive level, to either a monopolistic or oligopolistic equilibrium price. Production is also decreased, further decreasing social welfare by creating a deadweight loss. Sources of this market power are said to include the existence of externalities, barriers to entry of the market, and the free rider problem. Markets may fail to be efficient for a variety of reasons, so the exception of competition law’s intervention to the rule of laissez faire is justified if government failure can be avoided. Orthodox economists fully acknowledge that perfect competition is seldom observed in the real world, and so aim for what is called “workable competition”.[49][50] This follows the theory that if one cannot achieve the ideal, then go for the second best option[51] by using the law to tame market operation where it can.
[edit] Chicago School
Robert Bork argues that competition law is fundamentally flawed
Robert Bork argues that competition law is fundamentally flawed
See also: Chicago School (economics) and Neoclassical economics
A group of economists and lawyers, who are largely associated with the University of Chicago, advocate an approach to competition law guided by the proposition that some actions that were originally considered to be anticompetitive could actually promote competition.[52] The U.S. Supreme Court has used the Chicago School approach in several recent cases.[53] One view of the Chicago School approach to antitrust is found in United States Circuit Court of Appeals Judge Richard Posner’s books’ Antitrust Law[54] and Economic Analysis of Law[55]
Robert Bork was highly critical of court decisions on United States antitrust law in a series of law review articles and his book The Antitrust Paradox.[56] Bork argued that both the original intention of antitrust laws and economic efficiency was the pursuit only of consumer welfare, the protection of competition rather than competitors.[57] Furthermore, only a few acts should be prohibited, namely cartels that fix prices and divide markets, mergers that create monopolies, and dominant firms pricing predatorily, while allowing such practices as vertical agreements and price discrimination on the grounds that it did not harm consumers.[58] Running through the different critiques of US antitrust policy is the common theme that government interference in the operation of free markets does more harm than good.[59] “The only cure for bad theory”, writes Bork, “is better theory”.[57] The late Harvard Law School Professor Philip Areeda, who favours more aggressive antitrust policy, in at least one Supreme Court case challenged Robert Bork’s preference for non-intervention.[60]
[edit] Policy developments
Anti-cartel enforcement is a key focus of competition law enforcement policy. In the US the Antitrust Criminal Penalty Enhancement and Reform Act 2004 raised the maximum imprisonment term for price fixing from three to ten years, and the maximum fine from $10 to $100 million.[61] In 2007 British Airways and Korean Air pleaded guilty to fixing cargo and passenger flight prices.[62]
These actions complement the private enforcement which has always been an important feature of United States antitrust law. The United States Supreme Court summarised why Congress allows punitive damages in Hawaii v. Standard Oil Co. of Cal.:[63]
“ Every violation of the antitrust laws is a blow to the free-enterprise system envisaged by Congress. This system depends on strong competition for its health and vigor, and strong competition depends, in turn, on compliance with antitrust legislation. In enacting these laws, Congress had many means at its disposal to penalize violators. It could have, for example, required violators to compensate federal, state, and local governments for the estimated damage to their respective economies caused by the violations. But, this remedy was not selected. Instead, Congress chose to permit all persons to sue to recover three times their actual damages every time they were injured in their business or property by an antitrust violation. ”
In the EU, the Modernisation Regulation 1/2003 means that the European Commission is no longer the only body capable of public enforcement of European Community competition law. This was done in order to facilitate quicker resolution of competition-related inquiries. In 2005 the Commission issued a Green Paper on Damages actions for the breach of the EC antitrust rules,[64] which suggested ways of making private damages claims against cartels easier.[65]
[edit] Practice
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[edit] Collusion and cartels
Main articles: Collusion and Cartel
Scottish Enlightenment philosopher Adam Smith was an early enemy of cartels
Scottish Enlightenment philosopher Adam Smith was an early enemy of cartels
The core of competition policy has, since the 1980s, been the anti-price fixing cartel agenda, despite criticism by libertarians.[66] In The Wealth of Nations (1776) Adam Smith pointed out the cartel problem, but did not advocate legal measures to combat them.[67] Nowadays a far stricter approach is taken. Under EC law cartels are banned by Article 81 EC, whereas under US law the Sherman Act prohibitions of section 1. To compare, the target of competition law under the Sherman Act 1890 is every “contract, combination in the form of trust or otherwise, or conspiracy”, which essentially targets anybody who has some dealing or contact with someone else. In the mean time, Art. 81 EC makes clear who the targets of competition law are in two stages with the term agreement “undertaking”. This is used to describe almost anyone “engaged in an economic activity”,[68] but excludes both employees, who are by their “very nature the opposite of the independent exercise of an economic or commercial activity”,[69] and public services based on “solidarity” for a “social purpose”.[70] Undertakings must then have formed an agreement, developed a “concerted practice”, or, within an association, taken a decision. Like US antitrust, this just means all the same thing;[71] any kind of dealing or contact, or a “meeting of the minds” between parties. Covered therefore is a whole range from a strong handshaken written or verbal agreement to a supplier sending invoices with directions not to export to its retailer who gives “tacit acquiescence” to the conduct.[72]
Less of a consensus exists in the field of vertical agreements. These are agreements not between firms at the same level of production, but firms at different levels in the supply chain, for instance a supermarket and a bread producer. Recently, the United States Supreme Court has become more skeptical of antitrust cases predicated on agreements between companies that are not directly in competition with one another, such as a clothing manufacturer and a clothing retailer, while maintaining the strict prohibition against agreements that limit competition between companies at the same level of the supply chain, such as agreements between two retailers or between two distributors. Vertical agreements may still be illegal, but the burden of proving them illegal was raised by a number of recent cases from the per se illegal standard to a more demanding rule of reason standard.[73]
[edit] Dominance and monopoly
Main article: Monopoly law
The economist’s depiction of deadweight loss to efficiency that monopolies cause
The economist’s depiction of deadweight loss to efficiency that monopolies cause
When firms hold large market shares, consumers risk paying higher prices and getting lower quality products than compared to competitive markets. However, the existence of a very high market share does not always mean consumers are paying excessive prices since the threat of new entrants to the market can restrain a high-market-share firm’s price increases. Competition law does not make merely having a monopoly illegal, but rather abusing the power that a monopoly may confer, for instance through exclusionary practices.
First it is necessary to determine whether a firm is dominant, or whether it behaves “to an appreciable extent independently of its competitors, customers and ultimately of its consumer.”[74] Under EU law, very large market shares raise a presumption that a firm is dominant,[75] which may be rebuttable.[76] If a firm has a dominant position, then there is “a special responsibility not to allow its conduct to impair competition on the common market”.[77] Similarly as with collusive conduct, market shares are determined with reference to the particular market in which the firm and product in question is sold. Then although the lists are seldom closed,[78] certain categories of abusive conduct are usually prohibited under the country’s legislation. For instance, limiting production at a shipping port by refusing to raise expenditure and update technology could be abusive.[79] Tying one product into the sale of another can be considered abuse too, being restrictive of consumer choice and depriving competitors of outlets. This was the alleged case in Microsoft v. Commission[80] leading to an eventual fine of €497 million for including its Windows Media Player with the Microsoft Windows platform. A refusal to supply a facility which is essential for all businesses attempting to compete to use can constitute an abuse. One example was in a case involving a medical company named Commercial Solvents.[81] When it set up its own rival in the tuberculosis drugs market, Commercial Solvents were forced to continue supplying a company named Zoja with the raw materials for the drug. Zoja was the only market competitor, so without the court forcing supply, all competition would have been eliminated.
Forms of abuse relating directly to pricing include price exploitation. It is difficult to prove at what point a dominant firm’s prices become “exploitative” and this category of abuse is rarely found. In one case however, a French funeral service was found to have demanded exploitative prices, and this was justified on the basis that prices of funeral services outside the region could be compared.[82] A more tricky issue is predatory pricing. This is the practice of dropping prices of a product so much that in order one’s smaller competitors cannot cover their costs and fall out of business. The Chicago School (economics) considers predatory pricing to be unlikely.[83] However in France Telecom SA v. Commission[84] a broadband internet company was forced to pay €10.35 million for dropping its prices below its own production costs. It had “no interest in applying such prices except that of eliminating competitors”[85] and was being crossed subsidised to capture the lion’s share of a booming market. One last category of pricing abuse is price discrimination.[86] An example of this could be offering rebates to industrial customers who export your company’s sugar, but not to Irish customers who are selling their goods in the same market as you are in.[87]
See also: Dominance (economics) and Monopoly
[edit] Mergers and acquisitions
Main article: Mergers and acquisitions
A merger or acquisition involves, from a competition law perspective, the concentration of economic power in the hands of fewer than before.[88] This usually means that one firm buys out the shares of another. The reasons for oversight of economic concentrations by the state are the same as the reasons to restrict firms who abuse a position of dominance, only that regulation of mergers and acquisitions attempts to deal with the problem before it arises, ex ante prevention of creating dominant firms.[89] In the United States merger regulation began under the Clayton Act, and in the European Union, under the Merger Regulation 139/2004 (known as the “ECMR”[90]). Competition law requires that firms proposing to merge gain authorisation from the relevant government authority, or simply go ahead but face the prospect of demerger should the concentration later be found to lessen competition. The theory behind mergers is that transaction costs can be reduced compared to operating on an open market through bilateral contracts.[91] Concentrations can increase economies of scale and scope. However often firms take advantage of their increase in market power, their increased market share and decreased number of competitors, which can have a knock on effect on the deal that consumers get. Merger control is about predicting what the market might be like, not knowing and making a judgment. Hence the central provision under EU law asks whether a concentration would if it went ahead “significantly impede effective competition… in particular as a result of the creation or strengthening off a dominant position…”[92] and the corresponding provision under US antitrust states similarly,
“No person shall acquire, directly or indirectly, the whole or any part of the stock or other share capital… of the assets of one or more persons engaged in commerce or in any activity affecting commerce, where… the effect of such acquisition, of such stocks or assets, or of the use of such stock by the voting or granting of proxies or otherwise, may be substantially to lessen competition, or to tend to create a monopoly.[93]
What amounts to a substantial lessening of, or significant impediment to competition is usually answered through empirical study. The market shares of the merging companies can be assessed and added, although this kind of analysis only gives rise to presumptions, not conclusions.[94] Something called the Herfindahl-Hirschman Index is used to calculate the “density” of the market, or what concentration exists. Aside from the maths, it is important to consider the product in question and the rate of technical innovation in the market.[95] A further problem of collective dominance, or oligopoly through “economic links”[96] can arise, whereby the new market becomes more conducive to collusion. It is relevant how transparent a market is, because a more concentrated structure could mean firms can coordinate their behaviour more easily, whether firms can deploy deterrants and whether firms are safe from a reaction by their competitors and consumers.[97] The entry of new firms to the market, and any barriers that they might encounter should be considered.[98] If firms are shown to be creating an uncompetitive concentration, in the US they can still argue that they create efficiencies enough to outweigh any detriment, and similar reference to “technical and economic progress” is mentioned in Art. 2 of the ECMR.[99] Another defence might be that a firm which is being taken over is about to fail or go insolvent, and taking it over leaves a no less competitive state than what would happen anyway.[100] Mergers vertically in the market are rarely of concern, although in AOL/Time Warner[101] the European Commission required that a joint venture with a competitor Bertelsmann be ceased beforehand. The EU authorities have also focussed lately on the effect of conglomerate mergers, where companies acquire a large portfolio of related products, though without necessarily dominant shares in any individual market.[102]
[edit] Public sector regulation
Main articles: Public services, Regulated market, and EC regulation
See also: American Telephone & Telegraph, Kingsbury Commitment, Hush-a-Phone v. FCC, and Bell System divestiture
Public sector industries, or industries which are by their nature providing a public service, are involved in competition law in many ways similar to private companies. Under EC law, Articles 86 and 87 create exceptions for the assured achievement of public sector service provision. Many industries, such as railways, telecommunications, electricity, gas, water and media have their own independent sector regulators. These government agencies are charged with ensuring that private providers carry out certain public service duties in line of social welfare goals. For instance, an electricity company may not be allowed to disconnect someone’s supply merely because they have not paid their bills up to date, because that could leave a person in the dark and cold just because they are poor. Instead the electricity company would have to give the person a number of warnings and offer assistance until government welfare support kicks in.[103]