Month: February 2019

By Sarah Alberstein

Despite the fact that Amazon has quickly become the center of e-commerce, it has essentially evaded antitrust scrutiny.[1] But, it seems that this pattern of antitrust evasion is changing. In 2017, Lina M. Khan published a Yale Law Journal Note titled Amazon’s Antitrust Paradox.[2] In it, Kahn posits that Amazon’s business and marketing scheme has resulted in a low-profit yet overwhelmingly expansive business presence which has seeped into the consciousness of the average consumer – and, the consumer loves it.[3] One of Amazon’s main tactics has been to undercut pricing of brick-and-mortar stores until the stores go out of business, and then Amazon takes over the physical space once the original stores are gone. [4] This combination of consumer preference and satisfaction, price-cutting and retail takeovers, while still generating negligible net profits, Kahn argues, have allowed Amazon to essentially evade antitrust scrutiny while still benefiting from the marketplace evil antitrust law attempts to stamp out – anticompetition.[5] It seems, however, that international regulatory bodies are catching on.

Austria has become yet another country to launch an antitrust probe into Amazon’s practices.[6] The Austrian Federal Competition Authority (“BWB”) stated that it “will examine whether Amazon is discriminating against smaller stores using its platform and is favoring its own products on the Amazon marketplace.”[7] This investigation is similar to a 2018 European Union antitrust probe designed to “determine whether or not Amazon puts…third-party sellers at a disadvantage by using their sales data to boost Amazon’s own sales.”[8] Also in 2018, yet another investigation was launched by the German antitrust authority, The Bunderskartellamt.[9] The German investigation centered around determining whether Amazon is preventing fair e-commerce competition by overpowering other German online retailers, and forcing consumer and seller dependence on Amazon.[10]

Like the international shifts towards stricter application of antitrust law to Amazon, similar shifts are gaining ground in the United States.[11] Lina M. Kahn, the aforementioned author of Amazon’s Antitrust Paradox, was recently hired at the Federal Trade Commission and will be participating in hearings on competition and consumer protection.[12] Additionally, Congress is starting to pay attention to large tech company business practices through an antitrust lens.[13] Ranking member of the antitrust subcommittee of the House Judiciary Committee, Rep. David Cicillene, D-R.I. has stated his vision for the subcommittee as to “figure out the responsible way to regulate these large plaforms so that we are promoting competition, protecting privacy and making them responsible stewards of lots and lots of data” by “hold[ing] congressional hearings with the companies and technology experts, craft regulations, and…engage the public on issues of limiting corporate power.”[14]

Both scholastic and legislative scrutiny has emerged, prompting local and international attention to Amazon’s business practices and impact on the e-commerce marketplace. While Amazon has grown to become a giant within the e-commerce, and general retail space, without much antitrust scrutiny, it seems that the beginning of the end of this period is near for Amazon.

[1] Lina M. Kahn, Amazon’s Antitrust Paradox, 126 Yale L. J. 3 (Jan. 2017), https://www.yalelawjournal.org/note/amazons-anttrust-paradox.

[2] Id.

[3] Id.

[4] Chris Sagers, Crack Down on Amazon, Slate (June 19, 2017), https://slate.com/business/2017/06/yes-there-is-an-antitrust-case-against-amazon.html.

[5] Id.

[6] Boris Groehndahl, Amazon’s Legal Woes Grow in EU as Austria Opens Antitrust Probe, Washington Post (Feb. 14), https://www.washingtonpost.com/business/on-small-business/amazons-legal-woes-grow-in-eu-as-austria-opens-antitrust-probe/2019/02/14/34a7289a-3050-11e9-8781-763619f12cb4_story.html?noredirect=on&utm_term=.018fe4232048.

[7] Id.

[8] Sara Salinas, Amazon hit by EU Antitrust Probe, CNBC (Sept. 19, 2018), https://www.cnbc.com/2018/09/19/eu-probing-amazons-use-of-data-on-third-party-merchants.html.

[9] David Reid, Amazon is Being Investigated by the German Antitrust Autority, CNBC (Nov. 29, 2018), https://www.cnbc.com/2018/11/29/amazon-investigated-by-the-german-antitrust-authority.html.

[10] Id.

[11] Priya Anand, Amazon Antitrust Push Slowly Gains Ground, The Information (Jul. 19, 2018), https://www.theinformation.com/articles/amazon-antitrust-push-slowly-gains-ground.

[12] Id.

[13] April Glaser, Antitrust in the House, Slate (Jan. 16, 2019), https://slate.com/technology/2019/01/antitrust-david-cicilline-congress-facebook-google-monopoly.html.

[14] Id.

By: Kara Powell

Now more than ever, some people tend to post their whole lives on social media. Not only “friends” are seeing these posts anymore – photos and messages on social media may end up in court. New York State Supreme Court Judge Michael Corriero explains his experience with social media as follows: a defense attorney for a weapons charge tells Judge Corriero “he’s never had a weapon in his life, judge.”[1] Judge Corriero goes “on Facebook and [he] see[s] the kid there with two guns in each hand with a big smile on his face.”[2]

Social Media and Discovery:

A trend has been emerging to allow discovery of social media posts and messages, both public and private.[3] For example, the Florida Court of Appeals held both private and public photographs on Facebook are discoverable evidence in a civil suit.[4] The court explained that “Facebook itself does not guarantee privacy. By creating a Facebook account, a user acknowledges that her personal information would be shared with others. Indeed, that is the very nature and purpose of these social networking sites else they would cease to exist.”[5]

However, the Florida Court of Appeals distinguished the Nucci case from Root v. Balfour Beatty Construction, LLC.[6] The Root court ordered a much broader production of evidence from Facebook.[7] The requested material included videos, postings, photos, statuses, and likes, without any limitation.[8] The Root court held the discovery request was “’overbroad’” and compelled “’the production of personal information . . . not relevant to’ the [party]’s claims.”[9] In general, as long as the request is not overbroad, social media posts and messages are discoverable evidence.

Social Media and Bail Hearings:

Due to the increasing discoverability of social media posts and messages, such evidence can come in against defendants at every stage of the adjudication process. Even before trial, social media posts can affect defendants at bail hearings, determining whether a defendant is released or detained pending trial.

Federal judges must consider four factors set out in 18 U.S.C. § 3142(g) when determining whether a defendant should be released pending trial. A defendant’s Facebook posts are most relevant to the second factor: “the weight of the evidence against the person.”[10] For instance, if the government presents evidence of a defendant’s social media posts with photographic proof of the defendant committing the alleged crime, this increases the weight of the evidence against the person. In United States v. Choate,[11] the firearm with which the defendant was charged was “identical to one that [d]efendant can be seen holding in a video posted to Facebook.”[12] The judge determined the weight of the evidence (the second factor under § 3142(g)) was substantial, and noted the “alarming content” of the defendant’s Facebook posts.[13]

In addition, in United States v. Tolbert, the court concluded the weight of the evidence against the defendant was strong because the government introduced evidence of a Facebook message the defendant sent on the day of his arrest which included threats to the victims of his alleged crimes.[14]

At any point in the adjudication process, past posts and messages from Facebook can come in against defendants. In sum, be careful what you post.

[1] Eames Yates, A Judge Explains How Facebook Can Be Used Against You in Court, Bus. Insider (May 14, 2017, 7:19 AM), https://www.businessinsider.com/judge-explains-how-facebook-social-media-photos-can-be-used-against-you-in-court-2017-5.

[2] Id.

[3] See Heather Antoine, Judges Increasingly Allow Discovery of Private Facebook Content, IPWatchDog (Apr. 23, 2015), http://www.ipwatchdog.com/2015/04/23/judges-increasingly-allow-discovery-of-private-facebook-content/id=57060/.

[4] Nucci v. Target Corp., 162 So. 3d 146, 153–54 (Fla. Dist. Ct. App. 2015).

[5] Id. (internal quotations omitted).

[6] See Root v. Balfour Beatty Construction, LLC, 132 So. 3d 867 (Fla. 2d DCA 2014).

[7] See Id. at 869.

[8] See Id.

[9] Nucci v. Target Corp., 162 So. 3d 146, 154–55 (Fla. Dist. Ct. App. 2015) (citing Root v. Balfour Beatty Construction, LLC, 132 So. 3d 867, 868 (Fla. 2d DCA 2014)).

[10] 18 U.S.C. § 3142(g)(2).

[11] See United States v. Choate, No. 18-30179, 2018 U.S. Dist. LEXIS 58869, at *4 (E.D. Mich. Apr. 6, 2018).

[12] Id.

[13] United States v. Choate, No. 18-30179, 2018 U.S. Dist. LEXIS 58869, at *9 (E.D. Mich. Apr. 6, 2018).

[14] See United States v. Tolbert, No. 3:09-CR-56-TAV-HBG, 2017 U.S. Dist. LEXIS 198744, at *16-18 (E.D. Tenn. Dec. 4, 2017).

By: Kirk Kaczmarek

Pirates exist all over the world – not of the swashbuckling Captain Jack Sparrow variety, but the digital. Napster, Limewire, and The Pirate Bay are all popular platforms for sharing digital media freely and illegally. All three platforms have lost their preeminence due to litigation. However, even without their proverbial ships, the pirates remain. The music industry loses $12.5 billion to pirates annually.[1] Current trends project the film and television industry will hit $52 billion in losses to pirates by 2022.[2] And in 2014, Tru Optik estimated the video game industry lost $74 billion to pirates.[3]

To place these losses into perspective, consider global revenue. In 2018, the global video game industry produced $135 billion in revenue.[4] By comparison, the global music and film/television industries produced about $130 and $286 billion respectively.[5]

Digital rights management (DRM) has emerged as video game developers’ solution to the piracy problem. Transactions with DRM typically are not sales. Rather, the consumer pays a one-time licensing fee for access to the content. The DRM itself is a technology that prevents consumers from copying software. For the consumer, the transaction feels like a sale. For the business, the transaction protects copyrighted material by preventing piracy. However, this layer of security comes with drawbacks for consumers – law-abiding consumers cannot create additional copies for personal use, nor sell the original copy.[6] Furthermore, DRM is hardly a foolproof defense. Hackers regularly crack DRM and distribute the software.[7]

The music industry has already run its experiment with this form of DRM. In the early 2000’s, Apple, Microsoft, and other music distributors attached DRM to their digital music files. In the old days, people could go buy a vinyl record, an 8-track tape, or a CD and play it on any machine capable of reading the data; people could make as many copies as they wanted, or sell the original copy. With DRM, this kind of activity became impossible – for example, a song purchased on from Apple’s digital marketplace could only work on Apple devices and could not easily convert to a CD.[8] Additionally, consumers who purchased music with DRM ran the risk of losing that music if the servers hosting the media ever shut down.[9] Consumer outcry, (ultimately unsuccessful) antitrust lawsuits, and the advent of streaming services prompted digital music distributors to drop this form of DRM.[10] Streaming services like Spotify still attach DRM to the music files, but consumers view this as less intrusive – they aren’t paying to “own” the music. The film and television industries followed a parallel pattern, resulting in streaming services like Netflix.

Digital video game marketplaces today mirror those of the early 2000’s music and film industries. For example, Valve’s industry-leading digital video game marketplace for PC, Steam, attaches DRM to all game files.[11] To play a game via Steam, the consumer must launch the Steam application and either have an internet connection, or place the account in “offline mode” and reauthorize that mode on a bi-monthly basis; this prevents people on other computers from accessing games associated with that account. Consumers cannot make copies of the game, nor sell the original copy.[12] And because all the games require access to Steam’s servers, consumers are completely locked into the Steam ecosystem – if Steam were to go out of business, then presumably all 125 million of its users would lose access to the games they have “purchased.”[13]

And yet DRM remains a false barrier. Hackers invariably break the DRM and release the software, and pirates invariably steal it. If DRM does not prevent piracy and hurts the consumer, then why have it? Elmar Fischer, sales director for leading DRM technology firm Denuvo, claims initial sales are the focal point. DRM is only intended to actually function for a few weeks.[14] Thus, DRM and its associated licensure contracts are tools poorly suited to fighting an unwinnable war against piracy.

Furthermore, Fischer’s explanation cannot fully explain DRM’s prevalence. Because DRM is only briefly useful against piracy, and because consumers do not like DRM, why not allow it to expire following its usefulness? A short thought experiment may reveal some of the rational. If you are a developer, then you can place your game with Steam and other distributors – like the Xbox marketplace – to sell with DRM. This DRM locks the software into that distributor’s gaming application. If consumers purchase your game on Steam, but also want to play it on their Xboxes, they will need to buy additional copies for their Xboxes too.[15]

Some distributors, however, are pushing the industry away from this type of DRM. Notably, CD Projekt’s GOG only sells DRM-free games through its digital marketplace, though its catalogue of games is older and much smaller than Steam’s.[16] Additionally, free-to-play mobile games circumvent this particular issue altogether by basing their pricing plans on micro-transactions made during gameplay. However, traditional and free-to-play games appeal to different markets, and therefore a discussion of their different anti-piracy and contracting strategies may not be directly comparable.[17]

[1]The True Cost of Sound Recording Piracy to the U.S. Economy, RIAA (2019) https://www.riaa.com/reports/the-true-cost-of-sound-recording-piracy-to-the-u-s-economy/.

[2]DTVE Reporter, Piracy Cost to TV and film industry US$52bn by 2022, DTVE (Oct. 30, 2017), https://www.digitaltveurope.com/2017/10/30/piracy-to-cost-tv-and-film-industry-us52bn-by-2022/.

[3]See Luke Graham, Can Can video game piracy be stopped in two years?, CNBC (Jan. 14, 2016), https://www.cnbc.com/2016/01/14/can-video-game-piracy-be-stopped-in-two-years.html.

[4]See James Batchelor, Global games market value rising to $134.9bn in 2018, Gameindustry.biz (Dec. 18, 2018), https://www.gamesindustry.biz/articles/2018-12-18-global-games-market-value-rose-to-usd134-9bn-in-2018.

[5]Films Industry – Statistics & Facts, statistahttps://www.statista.com/topics/964/film/.

[6]See Digital Rights Management and Technical Protection Measures, Office of the Privacy Commissioner of Canada (Nov. 2006), https://web.archive.org/web/20160414002554/http://www.priv.gc.ca/resource/fs-fi/02_05_d_32_e.asp.

[7]See Ian Birnbaum, The Best Video Game DRM in the Business Is Getting Cracked Before Games Even Launch, Motherboard (Nov. 12, 2018), https://motherboard.vice.com/en_us/article/3k9qnw/the-best-video-game-drm-in-the-business-is-getting-cracked-before-games-even-launch.

[8]See Josh Lowensohn, Jury Finds Apple not liable of harming consumers in iTunes DRM case, The Verge (Dec. 16, 2014), https://www.theverge.com/2014/12/16/7402695/jury-decision-in-iTunes-iPod-DRM-case; Is it possible to burn Apple Music songs to CDs?,  NoteBurner, https://www.noteburner.com/apple-music/burn-apple-music-to-cd.html.

[9]See Mike Masnick, Reason #9,358 For Not Buying DRM’d Music: Walmart Shuts Down DRM Servers, techdirt (Sep. 29, 2008), https://www.techdirt.com/articles/20080929/0004132388.shtml.

[10]See id.  

[11]See Jennifer Menendez, How Steam Employs DRM & What That Means For Your Game, Black Shell Media (Jun. 28, 2017), https://blackshellmedia.com/2017/06/28/steam-employs-drm-means-game/.

[12]See id.

[13]See id.See also Taylor Soper, Valve reveals Steam’s monthly active user count and game sales by region, GeekWire (Aug. 3, 2017), https://www.geekwire.com/2017/valve-reveals-steams-monthly-active-user-count-game-sales-region/.

[14]See Haydn Taylor, Denuvo: “There is no uncrackable game. What we do is protect initial sales”, Gamesindustry.biz (Aug. 29, 2018), https://www.gamesindustry.biz/articles/2018-08-29-denuvo-and-irdeto-on-protecting-early-sales-from-piracy.

[15]See Charlie Osborne, Google engineer: DRM has nothing to do with piracy, ZDNet (Mar. 20, 2013), https://www.zdnet.com/article/google-engineer-drm-has-nothing-to-do-with-piracy/.

[16]See About GOG.com, https://www.gog.com/about_gog.

[17]See Max Preusse, The Dual Audience Dilemma: Appealing to Both Traditional and Crypto Gamers, Medium (May 23, 2018), https://medium.com/the-notice-board/the-dual-audience-dilemma-appealing-to-both-traditional-and-crypto-gamers-d75c584de84e.

Image Source: https://www.publicdomainpictures.net/en/view-image.php?image=119017&picture=pirate-ship-silhouette

By: Eric Richard

A big question floating around the legal industry these days is “what’s next?” There are mounting threats from artificial intelligence (AI), machine learning automation, and alternative legal service providers (ALSP) that seem to grow without hindrance on a regular basis.[1] There’s even competition specifically from four of the largest accounting firms that are threatening to siphon off work usually done by big law firms.[2] The legal industry has always been fierce with competition, such is a hazard of the profession, but what is changing the game recently is competition coming from other industries, as just mentioned.[3]

Deloitte & Touche, Ernst & Young, KPMG, and PricewaterhouseCoopers (the “Big Four”) are the four largest accounting firms in the world.[4] Over the past ten years, the Big Four have been creeping in on services traditionally offered by big law firms.[5] While the Big Four are not able to provide legal services in the U.S., they can in fact provide services that are “legal adjacent,” like e-discovery.[6] “Legal adjacent” meaning services that are able to be performed by those without a legal education and are usually done in preparation for services that do require them to be performed by a licensed attorney. E-discovery is a good example because anyone or any company is capable of gathering information in preparation for litigation, but only a licensed attorney can litigate the issue being researched. This selection of services is carving out a niche for itself among providers that can accomplish the tasks at less of a cost than the average law firm.[7]

So, what exactly has been the effect of these alternative legal service offerings from non-law firms? According to reports, approximately 23 percent of large firms and 21 percent of medium firms say that they have lost at least some of their business to the Bog Four over the previous year.[8] It’s not just individuals and business capitalizing on ALSPs, it’s law firms themselves as well.[9] In another report performed by Thomson Reuters in 2019, 87 percent of law firms that responded said that they were utilizing ALSPs 56 percent more than the rate of use in 2015.[10] This shows that not only do firms themselves have to worry about losing business to ALSPs, but the lawyers working for those firms are losing out as well. After all, faced with competition, what other choice do firms have than to incorporate the new business practices in order to keep up with the changing market?

Often this is referred to as “future proofing.” It’s the practice of taking steps now to take advantage of innovative ideas or practices in order to transition a business more successfully into the future.[11] In further efforts to “future proof” law firms have also begun looking inward for adaptation and not just to what is being offered by ALSPs.[12] Firms are even beginning to grapple with the concept of cryptocurrency when it comes to estate planning and accepting payments for services.[13] While this adaptations may seem small to some, they are an indication of drastic change to come in both the way law firms operate and the type of services that are likely to be offered.

[1] See Jason Tashea, ABA Techshow to delve into ‘future proofing’ law practices, A.B.A.J. (Jan. 29, 2019), http://www.abajournal.com/news/article/techshow-to-deal-with-future-proofing-the-practice-of-law.

[2] See Jason Tashea, Should BigLaw firms worry about increasing competition from the Big Four accounting firms?, A.B.A.J. (Sept. 2018), http://www.abajournal.com/magazine/article/law_firms_competition_accounting.

[3] See id.

[4] See id.

[5] See id.

[6] See Jason Tashea, Alternative legal services providers come into their own as major players, says news report, A.B.A.J. (Jan. 30, 2019), http://www.abajournal.com/news/article/alternative-legal-service-providers-worth-over-10-billion-come-into-their-own-says-new-report/.

[7] See id. See also Jason Tashea, Should BigLaw firms worry about increasing competition from the Big Four accounting firms?, A.B.A.J. (Sept. 2018), http://www.abajournal.com/magazine/article/law_firms_competition_accounting.

[8] See Jason Tashea, Alternative legal services providers come into their own as major players, says news report, A.B.A.J. (Jan. 30, 2019), http://www.abajournal.com/news/article/alternative-legal-service-providers-worth-over-10-billion-come-into-their-own-says-new-report/.

[9] See id.

[10] See id.

[11] See Jason Tashea, ABA Techshow to delve into ‘future proofing’ law practices, A.B.A.J. (Jan. 29, 2019), http://www.abajournal.com/news/article/techshow-to-deal-with-future-proofing-the-practice-of-law.

[12] See id.

[13] See id.

By: Annie Mullican

These days, it is hard to read an article or get on any form or social media or television without hearing about politics, and how terrible everything is. Every headline is a scandal or a mean quote by one public figure about another public figure. I gave up looking forward to a time when Democrats and Republicans would begin to work together years ago. But I was pleasantly surprised when I saw a news article about the PACT Act that is projected to be passed by Congress this session. The PACT Act stands for the Preventing Animal Cruelty and Torture, and it is a bill that would make animal cruelty a federal felony. Having taken an Animal Law class, I am keenly aware of the little protections that animals are afforded legally. However, I think many people both in law school and throughout the country will be most shocked by this law because they will realize that animal cruelty is actually not a federal felony. Videos depicting animal cruelty are considered a federal crime, but the underlying acts of cruelty themselves right now are not, which makes no sense. In my opinion, this law is monumental for our government in many ways right now.

The men behind this movement are two Florida congressmen: Ted Deutch (Democrat) and Vern Buchanan (Republican).^[1] These two congressmen say that they believe this law will close a large gap in our federal laws.^[2] Right now, all 50 states have laws that outlaw animal cruelty at the state level.^[3] However, if those criminals were to take animals across state lines, the original state would have no jurisdiction, and thus no power to go after those criminals.^[4] I think these two Congressmen are right – this bill will close a gaping gap in our country’s laws federal laws, and immensely aid law enforcement in catching abusers – especially those involved in animal fighting. Congressman Ted Deutch stated, “This is common sense, bipartisan legislation to bring some compassion to our animal laws.”^[5] So, if this is such a common sense law (which it is) why hasn’t it been passed already? According to these two Congressmen, in the past, the PACT Act has received unanimous support in the Senate, with over 284 bipartisan House cosponsors.^[6] In fact, the only reason the act has not passed in the past, according to these Congressmen was because House Judiciary Chairman Bob Goodlatte prevented it from coming to the floor.^[7] The Congressmen are optimistic that the bill may be passed with new Chairman Jerrold Nadler (D-NY) serving.^[8] The bill of course contains exceptions for hunting, veterinary care, or any actions to protect life or property from a serious threat from an animal.^[9]

I, too, am optimistic about this law. In a world where it feels like values and compassion have been abandoned, it is very nice to know that kindness and compassion for our furry friends is what continues to bring people together.

^[1] Proposed law could make animal cruelty a federal felony,”WECT NEWS, (Jan. 28, 2019) http://www.wect.com/2019/01/28/proposed-law-would-make-animal-cruelty-federal-felony/

^[2] Id.

^[3] Id.

^[4] Cole Higgins, “A Proposed Law will Make Animal Cruelty a Federal Felony,” CNN, (Jan. 28, 2019) https://www.cnn.com/2019/01/28/us/animal-cruelty-federal-felony-bill-trnd/index.html

^[5] Id.

^[6] Id.

^[7] Id.

^[8] Christopher Brito, “Proposed Law Would Make Animal Cruelty a Felony Across the U.S.” CBS, (Jan. 28, 2019) https://www.cbsnews.com/news/animal-cruelty-bill-re-introduced-congress-pact-vern-buchanan-ted-deutch/

^[9] Id.