Richmond Journal of Law and Technology

By: Daniel Eggleston

Since 1999, online piracy has caused a lot of problems for the music industry.[1]  While online streaming services like Pandora and Spotify have helped to curb illegal music downloads, they haven’t made it any easier for artists to get paid for their work.[2]  What’s more, streaming services and music companies often disagree when divvying up the money, leaving artists stuck somewhere in the middle. [3]

Traditionally, songwriters and recording artists assign their rights (to a work) to a third party known as a performance rights organization (PRO).[4]  PRO’s keep track of how many times a song is used, and determine the amount of royalties paid to the copyright holder.[5]  Copyrights to a song are usually assigned to a music publisher, while copyrights to a recording of a song are assigned to a record label.[6]

From the artist’s standpoint, how a PRO or record company tracks a song’s use is an opaque process.  Despite the advent of online streaming sites giving artists more exposure than ever, these artists are nevertheless having difficulty translating that exposure into profit.  For example, “a major music service . . . pays an average of $0.000035 per stream,” equating to approximately $35 for a million streams.[7]  For most artists, this means streaming revenue isn’t much of an income source.

The blockchain could be the answer artists have been looking for.[8]  The blockchain is “a way to structure data, and the foundation of cryptocurrencies like Bitcoin,” allowing parties to share a digital ledger across a network of computers.[9]  Anything of value can be tracked and traded on this ledger, and it doesn’t require a control center.[10]  This emerging technology will likely be used for many different business applications,[11] and it is already being applied to the music industry.[12]

Unlike the traditional method of assigning rights to a PRO or record label, artists can track the number of plays and purchases of a work through the digital ledger.[13]  This method offers greater transparency for the artists;[14] as “there would be no opacity in accounting, no delay in payment, and no confusion over who owned or controlled which rights to the work.”[15]

The music startup Revelator has already found success utilizing this new platform. On September 12, 2016, Revelator raised $2.5 million dollars in funding for its blockchain-based platform.[16]  Revelator will enable an artist to monitor his or her song rights and receive royalty distributions directly, eliminating the traditional role of a performance rights organization.[17]

This startup—along with others like it—will address some of the problems that have plagued the music industry since its inception, and will do so in a number of key ways.  First, these startups will resolve the long history of distrust between artists and the companies who handle their royalties because of the transparent nature of blockchain transactions.[18]  Second, these startups are highly efficient.  Unlike the traditional methods of royalty distribution and licensing, an artist can directly transfer or assign rights “per territory, per licensor, and per product,” and receive mass and micro-payments at fractional costs.[19]  Third, the blockchain creates a new business model allowing artists more control over the rights and distribution of their work.[20]  Finally, the digital ledger inherent in blockchain technology allows for the “global registry of rights information and distribution of assets with complete tracking, transparency, and trust.”[21]

Revelator is just one example of an emerging trend; many other startups are experimenting with the blockchain’s applicability to the music industry.[22]  However, big record companies and online streaming services still control how the majority of the market accesses music. As such, if these blockchain-based companies gain traction it will be interesting to see whether the bigger companies push back or begin to incorporate the blockchain technology into their business models.[23]

 

 

[1] https://techcrunch.com/2016/10/08/how-blockchain-can-change-the-music-industry/

[2] See id.

[3] See id.

[4] Music Royalties, Royalty Exchange, http://www.royaltyexchange.com/learn/music-royalties.

[5] See id.

[6] See id.

[7] Imogen Heap, Don Tapscott, Blockchain Could Be Music’s Next Disruptor, Fortune (Sep. 22, 2016 3:59 PM) http://fortune.com/2016/09/22/blockchain-music-disruption/.

[8] See id.

[9] Robert Hackett, Wait, What is Blockchain?, Fortune (May 23, 2016, 9:00 AM), http://fortune.com/2016/05/23/blockchain-definition/

[10] What is Blockchain?, IBM http://www.ibm.com/blockchain/what_is_blockchain.html.

[11] See id.

[12] See Heap & Tapscott, supra note 7.

[13] See id.

[14] See id.

[15] See id.

[16] Jacob Timp, Music Platform Raises $2.5 Million For Blockchain-Based Music Rights Technology, Coin Telegraph (Sep. 12, 2016, 12:49 PM), https://cointelegraph.com/news/music-platform-raises-25-million-for-blockchain-based-music-rights-technology.

[17] See Gideon Gottfried, Blockchain Platform Colu Partners With Revelator in Push to Fix Music’s Data, Billboard (Aug. 18, 2015, 10:40 AM), http://www.billboard.com/articles/business/6664006/colu-revelator-blockchain.

[18] See id.

[19] See id.

[20] See id.

[21] Id.

[22] See Jonathan Chester, How Blockchain Startups Are Disrupting The $15 Billion Music Industry, Forbes (Sep. 16, 2016, 11:07 AM), http://www.forbes.com/sites/jonathanchester/2016/09/16/how-blockchain-startups-are-disrupting-the-15-billion-music-industry/#77f4d29d652c.

[23] See id.

Photo Source:

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By: Madison Jennings,

Airbnb is a home-sharing service modeled after the same ‘sharing economy’ principles as ride-sharing services such as Uber. ‘Hosts’ list their residences on Airbnb as available for a nightly fee to travellers who would rather not spend the money to stay at a hotel.[1] Together, platforms like Airbnb and Uber make up the budding ‘sharing economy’, which allows individuals to utilize services they may not have had access to otherwise.[2]

At it’s inception, Air Bed and Breakfast (as it was called then) consisted of a few air mattresses on the floor of a San Francisco loft.[3] Today, owners, tenants, and property managers all promote their properties on Airbnb. Some offer just a room, others just a couch, and still others the entire property for the duration of the stay.[4] As Airbnb has grown and it’s base of users diversified, several legal issues have made themselves readily apparent.

While Airbnb is without a doubt a massive boon to young people looking to travel to faraway places but who lack the financial resources to stay at traditional hotels, not everyone has a favorable impression of the home-sharing service. In places like New York and even San Francisco (Airbnb’s city of origin) there has been significant push back against the application.[5]

Conceptually, Airbnb’s services are not inherently illegal, but many of the available properties do run afoul of local housing regulations. For example, New York homeowners cannot rent their homes out for fewer than thirty days, unless they themselves are also living on the property during the rental period.[6] While this has little significance for the owner who rents out their spare bedroom, both the individual who rents out their apartment while they themselves travel and the property manager who rents short-term using Airbnb are technically in violation. For many, this is a problem. One New York man, who rented out his bedroom while on vacation, returned home to a potential $40,000 fine from the city, despite his roommate being in the apartment the entire time.[7] Because the host who advertised the space was not there, it violated the law. Had the roommate advertised the room instead, there would have been no issue.

Despite legalizing Airbnb in 2014, the service’s home city of San Francisco has grown steadily more cold towards the home-sharing market. In 2015, the city put forth a proposition to impose hotel taxes and housing codes upon Airbnb hosts.[8] Though the proposition was ultimately defeated, Airbnb had to invest $8.5 million to do so, showing that support for Airbnb isn’t quite as universal as you might think.[9]

Generally, the main complaint that cities level against Airbnb is that it enables illegal hotel operations not only to function, but to flourish, depriving the city of tax revenues.[10]

The hotel industry is, of course, not as taken with the Airbnb service as the rest of the world seems to be. This should be obvious: the existence of a cheaper alternative eats away at the profits for traditional hotels. Not as obviously, the prevalence of Airbnb as an alternative to long-term tenancy of rental properties may have serious consequences for residents of cities with already high costs of living.

By having a revolving door of short-term tenants cycle through a property, landlords can maximize the property’s income potential. While the effects of this are difficult to clearly observe, there have been several instances of long-time tenants having their leases terminated, only for the same property to appear on Airbnb as a short-term rental within a few weeks.[11]

On top of that, there’s little in the way of real protection for hosts who welcome Airbnb users into their homes. Visitors have often caused damage or become troublesome towards neighbors.[12] Less frequently, however, visitors have overstayed their welcome. There has been at least one instance of an Airbnb tenant scheduling a temporary stay, and then refusing to leave for just long enough to acquire tenant’s rights, forcing the host to go to the court system in order to evict him.[13]

Then, an issue arises when hosts who are themselves renters are either ignorant of or choose to deliberately ignore their own lease obligations to the owner of their home. Many leases have specific requirements for subletting, as well as rules about how many consecutive days a guest can stay. Renters who run afoul of these lease provisions while playing host on Airbnb can face eviction themselves.[14]

All of these issues stem from one core problem with Airbnb: the people who use it are typically not familiar enough with the applicable fields of regulatory law to make informed decisions. Additionally, it’s hard to imagine your average young adult considering potential legal ramifications for something as seemingly-innocuous as allowing someone to crash on their couch for a few days or even a few weeks. Only law students and lawyers seem to be so unyieldingly cynical.

Some users who have faced unexpected legal consequences of hosting on Airbnb have called for more accountability from the service.[15] While the website currently states clearly that hosts need to check their own local laws to assure their compliance, many users think that the burden should be on Airbnb to effectively warn individuals of potential problems related to their geographic area.[16]

The question becomes: should Airbnb be culpable for ensuring that no one uses their platform in a way that violates local laws?

The answer, I’d say, is likely to be ‘no’. Airbnb is a tool, and it is ultimately the responsibility of the user to ensure that their use is compliant with the law.

 

 

[1] See Biz Carson, How 3 Guys Turned Renting an Air Mattress in Their Apartment into a $25 Billion Company, Business Insider, Feb. 23, 2016, http://www.businessinsider.com/how-airbnb-was-founded-a-visual-history-2016-2/#in-2007-the-two-roommates-living-in-san-francisco-couldnt-afford-to-pay-rent-the-pair-decided-to-turn-their-loft-into-an-area-that-could-fit-three-air-mattresses-along-with-the-mattress-and-a-nights-sleep-came-the-promise-of-a-breakfast-too-2.

[2] See id.

[3] See id.

[4] See id.

[5] See Elie Mystal, Airbnb Lawsuit Pits Poor New Yorkers Against Middle-Class New Yorkers As Hotels Laugh And Count Money, Above The Law, Oct. 26, 2016, http://abovethelaw.com/2016/10/airbnb-lawsuit-pits-poor-new-yorkers-against-middle-class-new-yorkers-as-hotels-laugh-and-count-money/?rf=1.

[6] See Ron Lieber, A Warning for Hosts of Airbnb Travellers, The New York Times, Nov. 30, 2012, http://www.nytimes.com/2012/12/01/your-money/a-warning-for-airbnb-hosts-who-may-be-breaking-the-law.html.

[7] See id.

[8] See Alejandro Lazo and Douglas Macmillan, San Francisco Voters Reject ‘Airbnb Initiative’, The Wall Street Journal, Nov. 4, 2015, http://www.wsj.com/articles/san-francisco-voters-reject-airbnb-initiative-1446622854.

[9] See id. 

[10] See Will Coldwell, Airbnb’s Legal Troubles: What Are The Issues?, The Guardian, July 8, 2014, https://www.theguardian.com/travel/2014/jul/08/airbnb-legal-troubles-what-are-the-issues.

[11] See Steven Hill, Evictions and Conversions: The Unsavory Side of Airbnb, The American Prospect, Oct. 19, 2015, http://prospect.org/article/evictions-and-conversions-dark-side-airbnb.

[12] See supra note 6.

[13] See Julie Bort, Airbnb Host: A Guest is Squatting In My Condo and I Can’t Get Him to Leave, Business Insider, July 21, 2014, http://www.businessinsider.com/airbnb-host-cant-get-squatter-to-leave-2014-7.

[14] See Stephen Fishman, Tenants: How to Make Airbnb Work for You and Your Landlord, Nolo, http://www.nolo.com/legal-encyclopedia/tenants-how-make-airbnb-work-you-your-landlord.html.

[15] See Will Coldwell, Airbnb’s Legal Troubles: What Are The Issues?, The Guardian, July 8, 2014, https://www.theguardian.com/travel/2014/jul/08/airbnb-legal-troubles-what-are-the-issues.

[16] See id.

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By: Sarah Wenrich,

Each state is able to create its own laws regarding cellphone use for drivers of motor vehicles, but 46 out of the 50 states plus Washington D.C. have prohibited the act of “texting while driving” for all drivers other than those in emergency vehicles. [1] As texting while driving has been shown to slow a driver’s reaction time as much as drinking four beers [2] and is also the cause of one out of every four accidents[3], this ban should come as no surprise.

In New York (as well as fourteen other states and the District of Columbia), there is also a statute that bans using hand held phone while driving, including talking on a hand held device. [4] This law extends to the use of a cell phone while stopped at a red light or in a tollbooth.[5] However, this behavior is still difficult for officers to observe, leaving the law enforced less often then it should be. [6] To combat this, a bill has been introduced in the New York Senate that would allow for the use of a device, currently being referred to as a “textalyzer,” to analyze a driver’s phone either when the driver is pulled over and suspected of using a phone while driving or after an accident occurs. [7] In pushing for this law, New York legislators are pursuing a theory of implied consent such that when you receive your driver’s license, you are implicitly giving consent to be subjected to a future textalyzer examination. [8]

The textalyzer would connect to the cell phone and relay to officers whether the cell phone was in use at the time in question. [9] Advocates for the use of the textalyzer address privacy concerns with this type of technology by arguing that it would not give the officers any access to personal data from the phone.[10] On the other side of the argument, people opposed to this technological probe into a person’s device express concern over the fact that a driver may not be able to recognize when more information is being passed onto law enforcement officers without their knowledge.[11] While it has not yet been voted on in legislative session, it could have effects that reach far beyond the borders of New York.

The state of Virginia is another state that prohibits texting while driving for drivers of any age.[12] The current law in Virginia prohibits drivers from “manually [entering] multiple letters or text in the device as a means of communicating with another person” [13] and from “[reading] any email or text message transmitted to the device or stored within the device.” [14] However, this law does not apply when the vehicle is legally stopped, allowing people at stoplights to text and email behind the wheel without penalty. [15] Additionally, because this law allows the use of a hand held phone for talking or GPS purposes, enforcement of this law is incredibly difficult. [16] If a police officer sees someone texting while driving, the driver can avoid a citation by either telling the officer he was not on the phone at all or that he was using it for a legal purpose.[17] If New York passes the use of the textalyzer technology, it could be an appealing option for police officers in Virginia to effectively enforce the ban on texting and driving.

While it is very challenging to enact new highway safety laws in Virginia,[18] this technology would not ban any new act by a driver; it would simply allow for the enforcement of the Virginia law already in place that bans texting and driving. The final textalyzer device has not yet been produced, but the CEO of Cellebrite Technology (the company that would produce the textalyzer) says that it will not be technologically challenging to produce.[19] Because the textalyzer technology could have the ability to analyze different applications and the activity in any or all of those applications,[20] slightly different versions could be adopted on a state-to-state basis in order to accommodate each state’s law.

The textalyzer may seem like a crazy and potentially invasive tactic for cracking down on law-breakers, but when texting and driving causes 11 teen deaths per day,[21] it may be what it takes to make people second guess grabbing their phone from behind the wheel. Unfortunately, if knowing that texting while driving causes 1.6 million accidents and 330,000 injuries per year[22] doesn’t stop a driver from texting, it’s unlikely that increased enforcement of the current law will do the trick.

 

 

[1] See Distracted Driving Laws, Governors Highway Safety Association, http://www.ghsa.org/html/stateinfo/laws/cellphone_laws.html (last visited October 30, 2016).

[2] See Texting and Driving Statistics, Texting and Driving Safety, http://www.textinganddrivingsafety.com/texting-and-driving-stats (last visited Nov. 3, 2016).

[3] See Cell Phone Use While Driving, Edgar Snyder & Associates, https://www.edgarsnyder.com/car-accident/cause-of-accident/cell-phone/cell-phone-statistics.html (last visited Nov. 2, 2016).

[4] See Distracted Driving Laws, supra note 1.

[5] See Matt Richtel, Texting and Driving? Watch Out for the Textalyzer, The New York Times (Apr. 27, 2016), http://www.nytimes.com/2016/04/28/science/driving-texting-safety-textalyzer.html?_r=0.

[6] See NEW YORK STATE’S MOBILE PHONE and PORTABLE ELECTRONIC DEVICE LAWS, Governor’s Traffic Safety Committee, http://safeny.ny.gov/phon-ndx.htm (last visited Oct. 30, 2016).

[7] See Karen Turner, A proposed ‘textalyzer’ bill might give cops the right to access your cellphone, The Washington Post (Apr. 13, 2016), https://www.washingtonpost.com/news/the-switch/wp/2016/04/13/a-proposed-textalyzer-bill-might-give-cops-the-right-to-access-your-cellphone/.

[8] See Richtel, supra note 5.

[9] Id.

[10] See Bruce Brown, Using your phone while driving may be stupider than ever, Digital Trends (Apr. 12, 2016, 5:38 AM), http://www.digitaltrends.com/mobile/cellebrite-textalyzer-driving-mobile-test-news/.

[11] See Turner, supra note 7.

[12] See Distracted Driving Laws, supra note 1.

[13] See Va. Code Ann. § 46.2-1078.1(A)(1) (2016).

[14] See Id at (A)(2).

[15] See What is the law on Texting While Driving in Virginia and What Does it Really Mean?, McGlone Law Firm, P.C., http://www.mcglonelaw.com/faqs/what-is-the-driving-while-texting-dwt-law-in-virginia-.cfm (last visited Oct. 30, 2016).

[16] Id.

[17] See Ashley Halsey III, Virginia’s new texting-while-driving law contains loophole, The Washington Post (Apr. 11, 2013), https://www.washingtonpost.com/local/trafficandcommuting/virginias-new-texting-while-driving-law-contains-loophole/2013/04/10/63bb64a2-a05a-11e2-82bc-511538ae90a4_story.html.

[18] Id.

[19] See Richtel, supra note 5.

[20] See Brown, supra note 10.

[21] See Texting and Driving Statistics, supra note 2.

[22] Id.

 

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By: Kathleen Pulver,

Ask any trial attorney what the most important part of a trial is and they will likely tell you it is jury selection.[1] In both criminal and civil trials, attorneys on both sides of the case are given the opportunity to question potential jurors through the process of voir dire.[2] Voir dire allows counsel to expose any potential bias and prior knowledge a juror may have about a case.[3] Based on their responses to these questions, an unlimited number of jurors may be removed “for cause.”[4] “For cause” removal allows attorneys to request that a juror be removed from consideration for things such as a close personal relationship to one of the parties or attorneys involved in the case.[5] Attorneys are also typically allowed a small number of preemptory challenges to jury selection, and this is where the “art” of jury selection comes in.[6]

In an effort to achieve the best results for their clients, many attorneys have begun to hire jury consultants.[7] Rising in prevalence since the 1980s, jury consultants are typically highly educated in the social sciences and occasionally the law, although a law school education is not required.[8] The first time jury consultants received major attention in the press was the O.J. Simpson trial.[9] Since the O.J. Simpson trial, jury consultants have been hired by defense counsel to assist in jury selection and trial strategy preparation in many cases, with some of the most notable being the Scott Peterson and Martha Stewart trials.[10] Now, the art of jury selection is also being broadcast into people’s homes with CBS’ new show, “Bull.”[11] Although not an entirely accurate depiction of the day-to-day workings of a jury consultant, “Bull” demonstrates how far jury selection has come since the 1980s, and presents some important legal questions for the future of jury consultants.[12]

In the 1995 trial of O.J. Simpson, Jo-Ellan Dimitrius, a relatively unknown trial strategist, was hired by Simpson’s defense team to help select the jury and prepare a trial strategy.[13] Dimitrius’ main job in 1995 was to design a questionnaire for voir dire which would help the defense select a jury that would be most sympathetic to Simpson’s side of the story.[14] Dimitrius studied the jurors’ body language, background, and comments during questioning, and then made recommendations to defense counsel.[15] In making her recommendations, Dimitrius was limited to the responses given by the jurors in voir dire.[16] Almost 10 years later, Dimitrius was hired by Scott Peterson’s defense team to help select a jury that would be most favorable to him.[17]

Unlike the O.J. Simpson trial where Dimitrius described the perfect juror as “a female African American with a high school education or less,” Dimitrius was looking for strong-willed people who were skeptical of authority and might believe that Laci Peterson, Scott Peterson’s wife, had died differently than the authorities were suggesting when selecting jurors for the Scott Peterson trial.[18] Once again, it was Dimitrius’ job to focus on the appearance of jurors and the way they answered questions during voir dire.[19] Juror responses to seemingly innocuous questions about favorite books, bumper stickers on their cars, religious affiliations, and which newspapers they read were turned in determinations about their personalities, their ability to keep an open mind during the trial, any bias they may hold towards either side, and ultimately the way they would rule at the end of the case.[20] Now, as “Bull” makes clear, jury selection doesn’t have to remain limited to the juror responses in court or their demeanor while they answer questions.[21]

The emergence of social media has greatly changed the process of juror selection.[22] Now instead of reviewing the information that jurors make available to attorneys in court, jury consultants and attorneys can access piles of additional information on a juror by conducting a simple internet search.[23] This presents a wealth of questions about the privacy to be afforded jurors and to the privacy of the jury process as a whole.[24] Ethically, the American Bar Association model rules say attorneys can conduct “passive” searches of social media profiles and the internet when researching jurors, as long as they do not “friend” the jurors on any social media sites to access additional information or act fraudulently.[25] Although ethically permissible, some courts have started to limit attorneys’ use of social media for the jury selection process.[26]

In Oracle Am., Inc. v. Google Inc., the court published an opinion regarding the use of social media in jury selection citing three main concerns: first, if jurors learn the attorneys are conducting internet searches into their lives, they will ignore the court’s instructions to not conduct searches into the attorneys and parties of the cases; second, allowing such in-depth searches of the potential jurors will allow attorneys to make inappropriate personal appeals to the jurors later in trial; and third, jurors are not the ones on trial during a case, and investigating them so heavily could be a breach of their right to privacy.[27] In this case, the court gave the attorneys two options: one) they could mutually consent to an outright ban on the use of the internet when conducting voir dire, and therefore have an extended period of time to ask the potential jurors additional questions; or two) they could use the internet, but they had to notify the jurors that they would be searching their social media sites, and the jurors will then be given an opportunity to adjust their privacy settings from their phones if they wish.[28] Either of these options has the potential to limit attorney’s access to information regarding the potential jurors, but may be the only way in which to protect the privacy rights that people have come to expect in today’s age.

Although unclear just how much of effect jury selection actually holds on the outcome of a case, it is unlikely that the use of jury consultants will slow down anytime soon. What is clear is that courts have started to take notice of the potential privacy problems which arise with the use of jury consultants and social media. [29] Only time will tell how courts decide to handle these issues as they arise.

 

 

[1] See generally Diana Walsh, The Peterson Trial / The art of high-stakes jury picking / 2 seasoned consultants compete in courtroom, SFGATE (Apr. 4, 2004) http://www.sfgate.com/bayarea/article/THEPETERSONTRIALTheartofhighstakesjury2397588.php

[2] See American Bar Association, https://www.americanbar.org/groups/public_education/resources/law_related_education_network/how_courts_work/juryselect.html.

[3] See id.

[4] See id.

[5] See id.

[6] See id.

[7] See Sally Kane, Jury Consultant, The Balance (July 25, 2016), https://www.thebalance.com/jury-consultant-2164304.

[8] See id.

[9] See Simpson Defense Team Hires Jury Consultant, N.Y. Times (Aug. 11, 1994), http://www.nytimes.com/1994/08/11/us/simpson-defense-team-hires-jury-consultant.html.

[10] See Diana Walsh, supra note 1; Leslie Eaton, Working Women Dominate the Jury for Stewart’s Trial, N.Y. Times (Jan. 27, 2004), http://www.nytimes.com/2004/01/27/business/working-women-dominate-the-jury-for-stewart-s-trial.html.

[11] See Roy Futterman, Talking ‘Bull’: Episode 5, Just Tell The Truth, Law 360 (Oct. 26, 2016), http://www.law360.com/articles/855908/print?section=legalindustry

[12] See id.

[13] Marc Davis & Kevin Davis, Jury consultants are changing with the times 20 years after the OJ verdict, Aba Journal (Jan. 1, 2015).

[14] See Simpson Defense Team Hires Jury Consultant supra note 9.

[15] See id.

[16] See Meet the ‘Secret Weapon’ Who Told O.J. Simpson’s Attorneys How To Pick a Jury, Inside Edition (Mar. 15, 2016), http://www.insideedition.com/headlines/15265meetthesecretweaponwhotoldojsimpsonsattorneyshowtopickajury.

[17] See Diana Walsh supra note 1.

[18] See id.; Simpson Defense Team Hires Jury Consultant supra note 9.

[19] See Diana Walsh supra note 1.

[20] See id.

[21] See Roy Futterman supra note 11; Marc Davis supra note 13.

[22] Marc Davis supra note 13.

[23] See id.

[24] Oracle Am., Inc. v. Google Inc., No. C 10-03561 WHA, 2016 U.S. Dist. LEXIS 39675, at *6-10, (N.D. Cal. Mar. 25, 2016).

[25] Model Rules of Prof’l Conduct r. 3.5(b) (Am. Bar Ass’n 1983). Each state has the opportunity to create their own rules, however, so this is not necessarily the standard everywhere.

[26] See e.g., Oracle, supra note 24; Omni Healthcare Inc. et al. v. Health First Inc. et al., 6:13-cv-0150, ECF No. 330 (M.D. Fla. August 19, 2016).

[27] See Oracle, supra note 24.

[28] See id.

[29] See id.

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By: Chresanthe Staurulakis,

Halloween 2016 marks the eighth anniversary of the release of Bitcoin, a decentralized, convertible, digital form of cryptocurrency.[1] Bitcoin was introduced by an anonymous creator, working under the pseudonym Satoshi Nakamoto.[2] Today, bitcoins function as a type of virtual currency.[3] Bitcoins can be traded, held or used to make online purchases on websites that accept it as a proper form of payment.[4] The system works as a computer protocol that lets users send money directly to anybody in the world over the internet.[5] While the technologies underlying Bitcoin are extremely complex, the process of trading bitcoins is fairly simple.[6]

First, one must download the Bitcoin “wallet” application onto one’s computer or phone.[7] This digital “wallet” functions the same way as a normal wallet but, instead of holding dollars, it holds bitcoins. This “wallet” also serves as a virtual bank account that allows the user to send or receive bitcoins or pay for items using bitcoins.[8] Once you have downloaded the “wallet,” you will receive a private key and a public key.[9] These two keys are what allows users to transfer bitcoins while keeping their identities anonymous.[10] Your private key is what you sign any transaction with to prove that you are the owner of the bitcoin you want to spend.[11] It is the key that allows you to send bitcoins to other users.[12] Only the owner of the “wallet” should know their private key.[13] Conversely, your public key serves as the address that you can share with other users in order to receive bitcoins from them.[14] To send bitcoins, you would enter the recipient’s Bitcoin address into the “wallet” app, enter the number of bitcoins you wish to send, authorize the transaction with your private key and hit “send” button.[15] The transferred bitcoins will immediately appear in the recipient’s wallet no matter where they are in the world.[16]

The way in which bitcoins may be transferred instantaneously and anonymously is part of their appeal and is the result of a completely trustless, peer-to-peer system.[17] There is no middleman or centralized server that may delay the money transfer.[18] There is nothing akin to a bank or PayPal system working to handle the transaction or verify the parties participating in the transaction.[19] Therefore, users are not required to pay any sort of transaction fee.[20] However, despite these advantages, there is still a lot of uncertainty surrounding bitcoins. Bitcoins are difficult to account for, report and value.[21] Moreover, Bitcoin makes it easy to participate in illegal activities such as money laundering or purchasing and selling goods on the black market.[22] Therefore, since its inception, Bitcoin has been the target of much regulation at both the federal and state level.

Many U.S. federal agencies have yet to draft completely new regulations pertaining specifically to virtual currency, like Bitcoin.[23] Instead, federal agencies have decided to oversee virtual currencies through pre-existing regulations.[24] The federal agencies that have been at the forefront of regulating bitcoins include the Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), and the Internal Revenue Service (IRS).[25] On September 17, 2015, the CFTC announced that it was going to treat bitcoins as “commodities” for regulatory purposes.[26] Businesses dealing with bitcoins would be required to register with the CFTC and be subject to its regulation.[27] FinCEN has chosen to treat and regulate companies working with bitcoins as “money service businesses” (MSB), specifically “money transmitters.”[28] In 2011, FinCEN expanded its definition of “money transmitters” to include businesses that, on behalf of a third party, mine virtual currencies, use virtual currency to purchase goods and services, convert virtual currency to other forms of currency, invest in virtual currency, or rent out systems and software for the purpose of mining virtual currency.[29] If one is simply a “user” who uses bitcoins to purchase goods and services for themselves, they are not considered a MSB.[30] In 2013, FinCEN issued a guide to further clarify what activities count as “virtual currency activities” and distinguish among “users,” “exchangers” and “administrators.”[31] If one is simply a “user” who uses bitcoins to purchase goods and services for themselves, they are not considered a MSB.[32] However, businesses that issue virtual currency or provide for the exchange of virtual currency for real currency or other forms of currency are considered MSB’s and will be forced to register with FinCEN and be subject to its regulations.[33] Failing to register with FinCEN is a federal crime.[34]

In addition, the SEC declared that it will reserve the right to police virtual currency companies and prosecute them if they are found to be involved in any fraudulent schemes.[35] The SEC exercised this right in September 2014 when the District Court for the Eastern District of Texas entered a judgment against Bitcoin Savings & Trust for conducting a Ponzi scheme soliciting investments in bitcoin-related investment opportunities.[36] Finally, the IRS stated that it will treat bitcoins as “property” and tax any transfers of bitcoins among users.[37]

There has been less uniformity among states when it comes to regulating bitcoins. At the state level, a money transmitter is either a company that accepts value from one person and gives it to another or accepts value from one person and gives it back to that same person at a later date and time.[38] Unlike at the federal level, state money transmitters must be licensed.[39] However, businesses working with virtual currency may have difficulty determining whether they qualify as money transmitters within their state since each state has its own definition of “money” and “transmission.”[40]

In July 2014, New York was the first state to propose and implement a regulatory system governing bitcoins, called BitLicense.[41] Under BitLicense, “virtual currency” is considered “money” and companies dealing with bitcoins are considered money transmitters.[42] The five activities that BitLicense considers to be “virtual currency business activities” include transmitting virtual currency for third parties, maintaining control over virtual currency for others, buying or selling virtual currency as a customer business, exchanging or converting virtual currency and controlling, administering or issuing virtual currency.[43] Any business that participates in any of these activities must go through an extensive application process to obtain a license.[44] Once the business has obtained a license, it must abide by the compliance requirements set forth by BitLicense and be audited annually.[45] Other states have followed in New York’s footsteps. In June 2015, California passed a bill providing for similar licensing and regulation requirements as New York’s BitLicense.[46] Washington has ruled that virtual currency is considered in the definition of “money transmission.”[47] However, Kansas, Texas and Florida have all ruled that virtual currency is not “money” and is not included under its money transmission laws.[48] Finally, states like New Jersey, Connecticut, Pennsylvania, North Carolina, Utah, and New Hampshire have all taken efforts to follow in New York and California’s footsteps but the proposals have yet to been made official.[49]

It is clear that regulating Bitcoin remains unchartered territory for most. While it may have numerous advantages, businesses and everyday users should continue to exercise caution when using Bitcoin. While it is not illegal, the use of bitcoins is being monitored closely by federal agencies and states, as they continue to grapple with this new technology and determine how it should be regulated.

 

[1]^. See Beyond Bitcoin: Blockchain – The Essential Building Block in Designing the Future, Reed Smith LLP 1 (2016), https://www.reedsmith.com/files/Publication/9ac2cd3f-efdf-48a1-959d-bcf79f8f0d71/Presentation/PublicationAttachment/34219750-39fe-4f37-881c-9e4abf86e2fd/Beyond%20Bitcoin%20Whitepaper%20US.pdf [hereinafter Beyond Bitcoin].

[2]^. See Tal Yellin & Dominic Aratari, What is Bitcoin?, CNN Money (last visited Oct. 26, 2016), http://money.cnn.com/infographic/technology/what-is-bitcoin/.

[3]^. See Beyond Bitcoin, supra note 1, at 7.

[4]^. See Marco Santori, Bitcoin, Digital Currency and the Law, LawLine 1, 11 (2013), https://www.lawline.com/course-center/bitcoin-digital-currency-and-the-law.

[5]^. See id. at 4.

[6]^. See Beyond Bitcoin, supra note 1, at 2.

[7]^. See Santori, supra note 4, at 6.

[8]^. See Yellin & Aratari, supra note 2.

[9]^. See Beyond Bitcoin, supra note 1, at 2.

[10]^. See Yellin & Aratari, supra note 2.

[11]^. See id.

[12]^. See id.

[13]^. See id.

[14]^. See id.

[15]^. See Santori, supra note 4, at 7.

[16]^. See id.

[17]^, See Beyond Bitcoin, supra note 1, at 1.

[18]^. See Santori, supra note 4, at 6.

[19]^. See Beyond Bitcoin, supra note 1, at 2.

[20]^. See id.

[21]^. See Santori, supra note 4, at 18.

[22]^. See Don He Et Al., Virtual Currencies and Beyond: Initial Considerations, IMF 1, 27 (2016), https://www.imf.org/external/pubs/ft/sdn/2016/sdn1603.pdf.

[23]^. See Beyond Bitcoin, supra note 1, at 9.

[24]^. See id.

[25]^. See id.

[26]^. See Bitcoin Theft Highlights Cryptocurrency Regulatory Uncertainty, Allen & Overy (Aug. 11, 2016), http://www.allenovery.com/publications/en-gb/Pages/Bitcoin-theft-highlights-cryptocurrency-regulatory-uncertainty.aspx [hereinafter Bitcoin Theft].

[27]^. See id.

[28]^. See Santori, supra note 4, at 21.

[29]^. See Beyond Bitcoin, supra note 1, at 10.

[30]^. See id.

[31]^. See id.

[32]^. See id.

[33]^. See id.

[34]^. See id.

[35]^. See Don He Et Al., supra note 22, at 29.

[36]^. See Beyond Bitcoin, supra note 1, at 11.

[37]^. See Don He Et Al., supra note 22, at 24.

[38]^. See Santori, supra note 4, at 28.

[39]^. See id. at 29.

[40]^. See id.

[41]^. See Beyond Bitcoin, supra note 1, at 7.

[42]^. See id.

[43]^. See id.

[44]^. See id.

[45]^. See id.

[46]^.See Beyond Bitcoin, supra note 1, at 7.

[47]^. See id.

[48]^. See Stan Higgins, Federal Judge Rules Bitcoin is Money in US Trial, Coin Desk (Sept. 20, 2016), http://www.coindesk.com/us-judge-bitcoin-money-coin-mx/.

[49]^. See Beyond Bitcoin, supra note 1, at 7.

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By: Hannah Newman,

There’s an app for that. The influx of mobile apps has changed the way people do banking, connect over social media, and even buy groceries. They have changed industries; they have altered the way businesses advertise to customers and how they provide their services. The healthcare industry is no different.

Constant technological innovations combined with a health-conscious population has created an explosion of mobile health (mHealth) apps.[1] In 2015, more than 3 billion mHealth apps were downloaded from major app stores, according to “The 2015 mHealth App Developer Economics Study.”[2] Some apps help individuals count calories or track exercise, while others play a more substantial role in medical treatment.[3] Through laws like Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009, the federal government has incentivized the healthcare industry to promote patient engagement and the access to personal health data.[4] These apps are designed for sophisticated diagnostic use and aim to facilitate physician and patient interaction and decision-making.[5] Some of the more advanced apps also “collect, store, analyze, and transfer individual health information and data previously available only through face-to-face consultations with a health care professional.”[6]

Patients and the overall health care system have benefited from the adoption of mHealth apps. These apps have provided convenient and fun ways to focus on dietary habits and fitness goals, and in return have created a more health-conscious population overall.[7] Mobile health apps improve patient engagement with their physician by promoting shared health management and chronic condition monitoring. They assist patients and caretakers in adhering to post-treatment care instructions that are essential to a successful recovery. They also allow patients to connect with support communities online that can aid in the emotional aspect of treatment and recovery. [8]

However, the health care industry has not seen widespread usage of mHealth apps due to some significant issues that concern governing regulations and privacy and security uncertainties.

Governing Regulations:

There is no single federal agency or law that governs the vast realm of mHealth apps.[9] There are two types of health apps, and this distinction affects how they are regulated. The first type is used by health care providers and is integrated with existing medical technologies.[10] They are used to assist in the delivery of care, for example to monitor and store lab or test results. The second type is used outside of the health care facility and is referred to as private apps. These include fitness apps, weight loss apps, and chronic condition monitoring apps.[11]

The FDA regulates medical devices through section 201(h) of the Food, Drug, and Cosmetic Act of 1938 and the Medical Device Amendments of 1976 to that act.[12] However, the FDA regulates only mHealth apps “whose functionality could pose a risk to a patient’s safety if the mobile app were to not function as intended.”[13] Therefore, the FDA regulation covers all of the first type of apps used by health care providers and also private apps that are intended for use in “diagnosis of diseases or other conditions in the cure, mitigation, treatment, or prevention of disease.”[14] This leaves a vast majority of health care apps that are not regulated by the FDA, thus creating valid concerns among providers.[15]

Privacy and Security:

Protection of health information has been a primary concern with the adoption of mHealth apps. Enacted in 1996, the Health Insurance Portability and Accountability Act (HIPAA) governs health care privacy laws.[16] HIPAA governs the transmission of electronic health records and applies to all “covered entities,” such as health care providers, health insurers, health care clearinghouses, and the business associates of such entities.[17] The Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) extends HIPAA protections to those who “create, receive, or transmit” health information.[18] Therefore, health apps that are used within a hospital, or by another covered entity, are protected under HIPAA.[19] The private apps that are used by an individual consumer are not subject to HIPAA, thus leaving an immense amount of health care information unprotected.[20]

As many of these apps are unregulated or unprotected, patients and providers may be subject to serious security threats. Forbes discovered through a recent study that 84% of all cyber attacks occurred at the application level.[21] The health care industry is no different. In the past two years, 81% of health care organizations have been breached.[22] A study conducted by security vendor Arxan found that of 19 FDA approved mobile health apps tested for security, 84% of them did not address at least two of the top ten security risks—application code tampering and reverse engineering.[23] Open Web Application Security Project (OWASP) identifies the top ten most critical security risks facing organizations.[24] The security issues that can result from such risks are “theft of personal health data and tampering with data.”[25] Through reverse engineering, an app can be reprogrammed to seriously alter treatment directions or dosage.[26] Information accessed through a security breach can include sensitive health information, but also other identifiable user information. Developers often sell this material to data aggregation companies, who then sell it to other third party parties such as credit card companies and life insurance companies.[27]

In order to prevent such privacy and security issues—and ultimate liability—the governing system of laws and regulations must stay current with the quickly developing world of mobile health apps.

 

 

[1] Kevin M. Henley, Tracking the Likelihood of Liability From Health Apps, Law360 (Mar. 11, 2015, 2:58 PM), http://www.law360.com/articles/629313/tracking-the-likelihood-of-liability-from-health-apps.

[2] Patrick Kehoe, 2016 State of Application Security: Top Health Care Apps in Critical Condition, Security Intelligence (Jan. 12, 2016), https://securityintelligence.com/2016-state-of-application-security-top-health-care-apps-in-critical-condition/.

[3] See supra note 1.

[4] See Sandeep S. Mangalmurti et. al., Medical Malpractice Liability in the Age of Health Records, New Eng. J. Med., 2060, 2060 (Nov. 18, 2010) http://www.nejm.org/doi/pdf/10.1056/NEJMhle1005210.

[5] Id.

[6] Supra note 1.

[7] Id.

[8] David L. Scher, The Big Problem with Mobile Health Apps, Medscape (Mar. 4, 2015), http://www.medscape.com/viewarticle/840335.

[9] David Pittman, 5 Problems with Mobile Health App Security, Medpage Today (Feb. 5, 2014), http://www.medpagetoday.com/practicemanagement/informationtechnology/44161.

[10] Y. Tony Yang & Ross D. Silverman, Mobile Health Applications: The Patchwork of Legal and Liability Issues Suggests Strategies to Improve Oversight, Health Affairs, 222, 222 (2014), http://content.healthaffairs.org/content/33/2/222.full.pdf.

[11] Id.

[12] Id. at 223.

[13] Id.

[14] Id.

[15] See supra note 8.

[16] See supra note 9.

[17] Jordan Cohen & Joanne Hawana, Mobile Health Apps Continue to Make Headlines, Mintz Levin (Mar. 16, 2016), https://www.healthlawpolicymatters.com/2016/03/16/mobile-health-apps-continues-to-face-privacy-security-and-consumer-protection-issues/.

[18] Supra note 9.

[19] See supra note 10, at 224.

[20] Id.

[21] See supra note 2.

[22] Id.

[23] Judy Mottl, Report: FDA-Approved Mobile Health Apps Pose Security Risks, FierceHealthcare (Jan. 10, 2016, 4:27 PM), http://www.fiercehealthcare.com/mobile/report-fda-approved-mobile-health-apps-pose-security-risks.

[24] See supra note 2.

[25] Supra note 23.

[26] Id.

[27] See supra note 17.

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By: Kathleen Hugo,

Major companies such as Amazon and Alphabet (Google) have started testing drone delivery service of their products.[1] A “drone” is an unmanned aerial vehicle that can fly at a low altitude to report traffic, survey power lines on the land below, and now, make deliveries.[2] While drones have been around for decades, today’s drones are highly sophisticated and can be remotely controlled to act like a “miniature helicopter.”[3] Many modern drones, including the prototypes for Amazon Prime Air and Alphabet’s Project Wing, are equipped with “sense and avoid” technologies to detect potential obstacles in the air space.[4] However, many people fear that drones could pose a significant danger, especially when making multiple deliveries in a single neighborhood or a crowded urban area. [5]

Amazon’s future delivery service, Prime Air, promises to “safely get packages to customers in 30 minutes or less using small unmanned aerial vehicles, also called drones.”[6] Amazon states that Prime Air will only be released once they “have the regulatory support needed to realize [their] vision.”[7] This is referring to the recent regulations published by the Federal Aviation Administration (FAA) regarding the use of Small Unmanned Aircraft. Part 107 of the FAA Regulations addresses commercial uses for drones weighing less than 55 pounds.[8]

These regulations prohibit the use of any unmanned aircraft that are outside the “visual line of sight,” or VLOS, of the remote pilot in command and the operator of the drone.[9] Additionally, the FAA regulation requires the drone to remain close enough to the operator and pilot that the aircraft may be seen “with vision unaided by any device other than corrective lenses,” meaning without the use of visual aids such as binoculars.[10] The regulation states that these restrictions may be waived if proven that the drone may be operated safely “under the terms of a certificate of waiver.”[11] Clearly, these regulations are a significant obstacle to Amazon Prime Air, as they prevent the operation of drones without a visual line of sight, essentially barring drone deliveries outside of a 10-mile radius.[12] While this news was challenging for the future of Amazon Prime Air, not all hope is lost. In August 2016, the FAA granted the first exemption to the “Visual Line of Sight” provision in Part 107, granting Precision Hawk, an agricultural drone company, the ability to fly drones outside the visual line of sight of the remote pilot.[13] The FAA’s exemption for Precision Hawk’s drones could be a step in the right direction toward unmanned aircraft delivery services such as Amazon Prime Air.

Despite the regulatory hurdle imposed by the FAA, Amazon announced in July 2016 that it would soon begin testing drone delivery services in the United Kingdom.[14] The United Kingdom’s Civil Aviation Authority (CAA) has granted Amazon permission to “test the drones when they are out of sight from operators, measure their ability to identify and avoid obstacles and gauge the success of operators flying multiple drones at once.”[15] Supporters hoped that the success of these tests would put pressure on the FAA to amend their regulations to allow for drone delivery services to operate out of the visual line of sight.[16] In August 2016, the FAA granted Alphabet’s Project Wing the permission to begin testing drone deliveries beyond the line of sight in one of six FAA-approved testing locations.[17]

While there are signs of progress, Amazon and Alphabet still face regulatory challenges in the United States. For now, consumers in the United States will have to wait a little longer before drone deliveries become an every day reality.

 

 

[1] See Ben Popper, Alphabet Will Begin Testing Its Delivery Drones Inside the U.S., The Verge (Aug. 2, 2016, 1:19 PM), http://www.theverge.com/2016/8/2/12353788/google-autonomous-drone-project-wing-faa-approved-test.

[2] See Troy A. Rule, Airspace in an Age of Drones, 95 B.U. L. Rev. 155, 157-161 (2015); see also Martyn Williams, New FAA Rules Mean You Won’t Get Amazon Drone Delivery Anytime Soon, PC World (June 21, 2016, 9:00 AM), http://www.pcworld.com/article/3086790/legal/new-faa-rules-mean-you-wont-get-amazon-drone-delivery-anytime-soon.html.

[3] See Rule, supra note 2, at 160.

[4] See David Z. Morris, Top Amazon Exec Says U.S. Rules Could Delay Drone Delivery, Fortune (Jan. 19, 2016, 2:00 PM), http://fortune.com/2016/01/19/amazon-drone-delivery-delay/.

[5] See Adario Strange, 3 Challenges Keeping Amazon’s Delivery Drones From Taking Flight, Mashable (Dec. 1, 2015, 2:46 PM), http://mashable.com/2015/11/30/amazon-prime-air-reality/#Ih1ZzM9fakqR.

[6] See Amazon Prime Air, https://www.amazon.com/b?node=8037720011 (last visited Oct. 21, 2016).

[7] See id.

[8] See 14 C.F.R. § 107 (2016), http://www.faa.gov/uas/media/Part_107_Summary.pdf.

[9] See id. at § 107.31(Visual line-of-sight (VLOS) only; the unmanned aircraft must remain within VLOS of the remote pilot in command and the person manipulating the flight controls of the small UAS. Alternatively, the unmanned aircraft must remain within VLOS of the visual observer.”).

[10] See id.

[11] See Waiver Policy and Requirements, 14 C.F.R. § 107.200 (2016).

[12] See Luke Johnson, 9 Things You Need to Know About the Amazon Prime Air Drone Delivery Service, Digital Spy (July 26, 2016), http://www.digitalspy.com/tech/feature/a775701/9-things-you-need-to-know-about-the-amazon-prime-air-drone-delivery-service/.

[13] See BI Intelligence, The FAA has Granted a Major Drone Exemption to This One Company, Business Insider (Aug. 31, 2016, 2:02 PM), http://www.businessinsider.com/faa-grants-drone-exemption-to-precisionhawk-2016-8; see also Lora Kolodny, In a First, FAA Allows PrecisionHawk to Fly Drones Where Pilots Can’t See Them, TechCrunch (Aug. 29, 2016), https://techcrunch.com/2016/08/29/in-a-first-faa-allows-precisionhawk-to-fly-drones-where-pilots-cant-see-them/.

[14] See Gwen Ackerman, Amazon Partners With U.K. to Test Deliveries by Aerial Drone, Bloomberg (July 26, 2016, 6:17 AM), https://www.bloomberg.com/news/articles/2016-07-26/amazon-partners-with-u-k-government-to-test-delivery-by-drone.

[15] See id.

[16] See Cecelia Kang, Amazon Expands Drone Testing in Britain, New York Times (July 25, 2016), http://www.nytimes.com/2016/07/26/technology/amazon-expands-drone-testing-in-britain.html?_r=0.

[17] See Popper, supra note 1.

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By: Hsiao-Han Wang

“Personal care products” is the term usually used by people to refer to variety items found in health and beauty sections of stores.[1] These include but not limited to items like shampoo, body lotion, toothpaste, shaving cream, as well as other cosmetics such as lipsticks and eye-makeups. There are estimated eight billion personal care products sold annually and the industry creates more than 200 billion dollars of gross domestic product (GDP) value in the United States.[2] Personal care products expose people to multiple chemical ingredients everyday simply via using them: in America, that means an average of twelve personal care products that contain 168 different chemicals for women, and six personal care products that contain 85 different chemicals for men.[3]

Personal care products play a very intimate role in our daily life and most of them will come to contact directly with our skin, hair, and other body organs eventually. However, in despite of the high volume of use and the safety concerns, many chemicals in personal care products are not subject to either statutory or regulatory restrictions. According to Food and Drug Administration (FDA), products “intended to cleanse or beautify are generally regulated as cosmetics,” therefore, are not subject to premarket-approval from the agency.[4] Moreover, the laws governing the safety of personal care products have not been substantially updated since 1938.[5] Due to the outdated statutory requirement, FDA has prohibited or restricted only eleven ingredients from use in personal care products[6] which is far less than the number of chemicals that have been actually put into the industry.[7]

The FDA’s lack of power over these personal care products also reflects in the case which a nine-year-old child lost most of her hairs after using one celebrity-endorsed hair product for only three times.[8] After receiving 127 complaints from the consumers, FDA issued a safety alert on this line of hair cleaning products and pointed out that thousands of complaints were received by the hair products company. [9] However, while about twenty-one thousand consumers claimed to encounter health problems including hair loss and allergy reaction like itching and rashes, FDA does not have the authority to recall these products.[10]

It is true that most chemicals contained in personal care products are relatively harmless and may only post little or no risk to our health compared to products subject to rigorous restrictions (such as drugs). Nonetheless, it is also true that some chemicals used in cosmetics and other personal care products may result in serious health problems, including cancer and reproductive harm.[11] Chemicals that have been linked to health problems can be divided into five major groups: “frank carcinogens (cancer causing); precursors of or []hidden[] carcinogens; endocrine or hormonally disruptive; penetration enhancers; and allergens.”[12] Endocrine disruptors, for example, may be especially harmful for pregnant women and infants since they may impose “greatest risk during prenatal and early postnatal development when organ and neural systems are forming.”[13] Another example, formaldehyde-based hair straightening products, “have been linked to hair loss, rashes, blisters, nosebleeds, bleeding gums, and loss of taste and smell.”[14]

The health risks of personal care products are well acknowledged by many other countries. For example, the European Union has banned more than 1,300 chemicals from personal care products and restricted an additional 256.[15] This number is far higher than the eleven restrictions and prohibitions mentioned above in the United States. In addition to health risks, environmental concerns should also be taken into consideration.[16] Furthermore, the needs to have a uniform standard for the cosmetics industry to follow are too addressed by a lot of small business owners.[17]

In light of the risks imposed to the society, personal care products should be subject to stricter and updated statutory and regulatory requirements. Particularly, granting more authority to FDA would enable the agency not only to stop products with potential risks at the frontend but also to respond efficiently and effectively once any harm or risk is realized. From the aspect of protecting consumers, American people deserve to have a safe and reliable market environment that is at least equally regulated as those in other countries. From the other aspect of the personal care products industry, it would also promote American businesses’ long-term competitiveness wherever they are selling their products domestically, exporting, or operating in the international markets all over the world.

 

 

[1] See U.S. Food and Drug Administration (FDA), http://www.fda.gov/ForIndustry/FDABasicsforIndustry/ucm238796.htm (last visited Oct. 19, 2016).

[2] See Exploring Current Practices in Cosmetic Development and Safety: Hearing Before the S. Comm. on Health, Educ., Labor, & Pensions, 114th Cong. (2016) (statement of Sen. Lamar Alexander, Chairman, S. Comm. on Health, Educ., Labor, & Pensions); see also Personal Care Products Council, Economic & Social Contributions Report 3 (2016), http://www.personalcarecouncil.org/sites/default/files/PCPC%20FINAL%20Economic%20&%20Social%20Contributions%20Report%20-%20Web.pdf (“in 2013, the personal care products industry added $236.9 billion to U.S. GDP”).

[3] See Exploring Current Practices in Cosmetic Development and Safety: Hearing Before the S. Comm. on Health, Educ., Labor, & Pensions, 114th Cong. (2016) (statement of Scott Faber, Senior Vice President for Government Affairs, Environmental Working Group).

[4] See FDA, Supra note 1.

[5] See Exploring Current Practices in Cosmetic Development and Safety: Hearing Before the S. Comm. on Health, Educ., Labor, & Pensions, 114th Cong. (2016) (statement of Sen. Dianne Feinstein, S. Comm. on Health, Educ., Labor, & Pensions); See also, e.g., 21 U.S.C. § 361 (LEXIS through Pub. L. 114-244).

[6] See Exploring Current Practices in Cosmetic Development and Safety: Hearing Before the S. Comm. on Health, Educ., Labor, & Pensions, 114th Cong. (2016) (statement of Sen. Dianne Feinstein, S. Comm. on Health, Educ., Labor, & Pensions).

[7] See Breast Cancer Fund, http://www.breastcancerfund.org/clear-science/environmental-breast-cancer-links/cosmetics/ (last visited Oct. 20, 2016) (“[i]n the U.S., major loopholes in federal law allow the cosmetics industry to put thousands of synthetic chemicals into personal care products”).

[8] See Daily Hornet, Colorado Mom Says WEN Shampoo Caused Daughter to Go Bald (Oct. 19, 2016), https://dailyhornet.com/2016/colorado-mom-says-wen-shampoo-caused-daughter-to-go-bald/.

[9] See FDA, WEN by Chaz Dean Cleansing Conditioners: FDA Statement – Investigation of Adverse Event Reports (July 19, 2016), http://www.fda.gov/Safety/MedWatch/SafetyInformation/SafetyAlertsforHumanMedicalProducts/ucm511890.htm; see also Tina Sigurdson, FDA Investigating Hair Care Products Linked to Balding But Can’t Stop Sales, Enviroblog (July 26, 2016), http://www.ewg.org/enviroblog/2016/07/fda-investigating-hair-care-products-linked-balding-cant-stop-sales.

[10] See Tina Sigurdson, FDA Investigating Hair Care Products Linked to Balding But Can’t Stop Sales, Enviroblog (July 26, 2016), http://www.ewg.org/enviroblog/2016/07/fda-investigating-hair-care-products-linked-balding-cant-stop-sales.

[11] See Scott Faber, supra note 3.

[12] Dr. Frank Lipman, Major Risks From Cosmetics & Personal Care Products, http://www.drfranklipman.com/risks-from-toxic-ingredients-in-cosmetics-personal-care-products/ (last visited Oct. 20, 2016).

[13] National Institute of Environmental Health Sciences, http://www.niehs.nih.gov/health/topics/agents/endocrine/ (last visited October 20, 2016).

[14] Scott Faber, supra note 3.

[15] See Sen. Dianne Feinstein, supra note 6.

[16] See, e.g., Alistair B.A. Boxall, et al., Pharmaceuticals and Personal Care Products in the Environment: What Are the Big Questions, 120 Env’t Health Persps. 1221–29 (2012).

[17] See Exploring Current Practices in Cosmetic Development and Safety: Hearing Before the S. Comm. on Health, Educ., Labor, & Pensions, 114th Cong. (2016) (statement of Curran Dandurand, CEO & Co-founder, Jack Black, LLC) (“the science establishing ingredient safety should not change from state to state, therefore it does not make sense to allow varying state regulations regarding cosmetics”).

Photo Source:

http://lifestyleorganic.org/wp-content/uploads/2013/02/toxic-cosmetics.jpg

By: Genevieve deGuzman

The World Wide Web, or simply Web as we know it, actually only covers the surface of an ocean of information. The search engines we use, like Google and Bing, only float on the surface and cast a short net that follow links or static pages between sites.[1] The apps, merchants, social media, news, etc. we access on a daily basis barely make up less than one percent of the actual Web content.[2] These comprise what is more aptly called the Surface Web: anything accessible through search engines.

Diving further down, we would find the databases and academic journals hidden behind private networks or standalone pages that connect to nothing at all and do not surface to the Web. These are still reasonably known. The Deep Web is anything inaccessible through search engines, and a study conducted in 2001 revealed that the Deep Web was approximately 400-500 times the size of the Surface Web.[3]

Within the Deep Web lies the Dark Web, which refers to a collection of secret websites “concealed to hide in plain sight or reside within a separate, but public layer of the standard internet.”[4] They can only be accessed using certain special software, like The Onion Router, more commonly known as Tor.[5] Tor not only allows its users to access these concealed sites but also allows websites to operate on “hidden services” by replacing it with a Tor-based web address; the only way to access a hidden service is to know the hidden service’s Tor-based address.[6] It thwarts traditional IP identification and investigative techniques by masking a user’s IP address and its administrator’s identity.[7] Using Tor would render a user’s web activity as practically untraceable by bouncing signals around a “distributed network of relay computers” run by Tor-enabled volunteer computers around the world.[8]

Tor not only allows anonymous communication online for sensitive information, but more recently, Tor has become a “hub for black markets that sell or distribute drugs, [weapons, and people,] stolen credit cards, illegal pornography, pirated media,” assassins for hire, political dissidents, and more.[9] Tor is accessible and available to the public for free by downloading the Tor browser bundle.[10]

Tor effectively renders users anonymous to websites and to law enforcement officers who may be monitoring websites. However, Tor administrators claim that they are not aware of anyone being sued or prosecuted in the United States for using Tor.[11] Further, they believe it is legal under United States law.[12] Although it may be used for illegal purposes, Tor asserts that it was developed as a “tool for free expression, privacy, and human rights.”[13] Still, these Tor relays may still be subject to U.S. laws such as the Electronic Communications Privacy Act of 1986[14] which extends government restrictions on wire taps on telephone calls to include transmissions of electronic data via computers. Using Tor may not be illegal nor is merely masking one’s IP address and browsing history and activity, but as its anonymity tools are increasingly used for illegal activity, it may become more of an issue. Tor and other Dark Web tools are almost certain to gain more exposure and popularity, and with its increase in usage will come an increase in legal concerns and action. That said, you can expect the Dark Web to be an increasingly relevant factor for U.S. lawmakers to consider.

 

[1] See Jose Pagliery, The Deep Web you don’t know about, CNN, Mar. 10, 2013, available at http://money.cnn.com/2014/03/10/technology/deep-web/index.html.

[2] Id.

[3] Bright Planet, Understanding the Deep Web in 10 Minutes (2013), available at http://cdn2.hubspot.net/hub/179268/file-377288418-pdf/docs/understandingthedeepweb_20130311.pdf?t=1476906418725.

[4] Id.

[5] Id.

[6] See id; see also United States v. Werdene, No. 15-434, 2016 U.S. Dist. LEXIS 66311 (E.D. Pa. May 18, 2016)

[7] Id. See also United States v. Johnson, No. 15-00340-01-CR-W-GAF, 2016 U.S. Dist. LEXIS 145180 (W.D. Mo. Oct. 20, 2016).

[8] Id.

[9] Supra note 3.

[10] Id. See also Tor, https://www.torproject.org/ (last visited Oct. 20, 2016).

[11] Tor, https://www.torproject.org/ (last visited Oct. 20, 2016).

[12] Id.

[13] Id.

[14] Electronic Communication Privacy Act of 1986, 100 Stat. 1848.

Photo Source:

http://www.pandasecurity.com/mediacenter/src/uploads/2016/06/deepweb1.jpg