Carpenter v. United States – What future for digital privacy?

Picture1By Jabu Diagana

On November 29th, 2017, the Supreme Court will hear Carpenter v. United States and decide whether the government violates the Fourth Amendment when it accesses a third party’s record of an individual’s cell phone location without a warrant.

Carpenter was a 2011 case where the defendant was convicted of a series of interstate robberies based on his phone location data, also known as cell-site-location information (CSLI). CSLI is maintained by wireless carriers and is a record of the cell towers our phones connect to every time we transmit calls, texts, emails, or any other digital information. It usually includes the precise geolocation of each tower as well as the day and time the phone tried to connect to it. The government obtained CSLI under the Stored Communications Act (SCA), a 1986 federal statute which provides that a “governmental entity may require a provider of electronic communication service or remote computing service to disclose” records using either a warrant, or, as in Carpenter, using a court order issued “if the governmental entity offers specific and articulable facts showing that there are reasonable grounds to believe that the contents of a wire or electronic communication, or the records or other information sought, are relevant and material to an ongoing criminal investigation.”

Stated differently, the real question is to what extent does the SCA allow the government to obtain CSLI without a warrant? Or to put it more bluntly, is the SCA unconstitutional?

The Sixth Circuit holding in Carpenter turned on the “third-party doctrine.”

The third-party doctrine originated in Smith v. Maryland, a 1979 case in which the Supreme Court found that installing and using a pen register to record a phone user’s dialed numbers was not an illegal search and didn’t merit Fourth Amendment protections. According to the Smith court, although the contents of our phone conversations are protected, information about the sender or receiver is not, since they willingly disclose that information to the phone company every time they place a call. Following this logic, the Sixth Circuit first found that the third-party doctrine also authorizes the government to access CSLI as “business records” directly from a cell phone company without a warrant. Additionally, it found that when a person uses their cell phone, they should be aware that their location data is shared with the service provider and should not have any “reasonable expectation of privacy” with respect to that data.

Although Carpenter is about users’ cell locations information, the principle at issue spans over other aspects of our digital privacy, given all the data we now share with third parties through the use of smartphones, wifi hotspots, apps, and cloud-based services. As Justice Sotomayor highlighted in her United States v. Jones concurrence, whatever our current societal expectations of privacy are, our citizenry can “attain constitutionally protected status only if our Fourth Amendment jurisprudence ceases to treat secrecy as a prerequisite for privacy.”

Whether Carpenter is affirmed or overruled, the court discourse will likely revolve around the impracticability of the “third-party doctrine” in the digital age. Does sharing with one mean sharing with many? It is tempting to recommend that the court abandons the “third party” doctrine, but that may be over simplistic. If the court choose to modify it, then where should the line be drawn? should there be a difference between information voluntarily conveyed to a third party or stored on the cloud? There is also a time component to this issue.  How long is continuous tracking too long? All these questions, a priori theoretical will be fundamental to the future of our privacy.

Cheerleaders and Bananas: Star Athletica’s Implications for a Popular Halloween Costume

RI banana costume from complaintBy Anna McCurley

Every Halloween, some of the most popular costumes come with more than funny hats, swords, or fake blood – they come with copyright implications. Halloween costumes often correspond to the summer’s biggest blockbuster movie, popular cartoon princesses, or what’s going on in politics. This year, the winner of the coveted “most popular costume” prize is Wonder Woman and the two previous years it went to Harley Quinn. Halloween costumes are an opportunity to show humor, political views, fandom, admiration, and creativity. Such expression often entails the use (or misappropriation) of copyright.

However, this post isn’t about the elaborate costumes that exude fandom. This post is about cheerleading uniforms and bananas.

Rasta Imposta makes banana costumes. If you’ve shopped for Halloween costumes anytime in the past five years, you’ve likely seen one. Rasta has been producing banana costumes since 2001. In that time, they have sued four other companies for copyright infringement of their banana costume design. Three of those cases ended in closed settlements, most recently with Kmart Stores. One is still pending.

U.S. copyright law protects art, but not useful articles, and costumes occupy the murky space between the two. Things are even murkier in light of the Supreme Court’s newly-minted test for separating pictorial, graphic, or sculptural (“PGS”) works from associated useful articles under § 101 of the Copyright Act.

Decided in March of this year, Star Athletica v. Varsity Brands does away with the idea that the PGS elements of a costume must be physically removable from its useful aspects (serving as clothes) which the Second Circuit previously employed. The Supreme Court established a two part test: that a useful article (here, a cheerleading uniform) is eligible for copyright protection “only if the feature (1) can be perceived as a two- or three- dimensional work of art separate from the useful article and (2) would qualify as a protectable pictorial, graphic, or sculptural work – either on its own or fixed in some other tangible medium of expression – if it were imagined separately from the useful article into which it is incorporated.” The court held that only the “two-dimensional work of art fixed in the tangible medium of the uniform fabric” was copyrightable. “[R]espondents have no right to prohibit any person from manufacturing a cheerleading uniform of identical shape, cut, and dimensions to the ones on which the decorations in this case appear.”

The Court focused its separability analysis on the admissibility of the PGS work after it is removed from the useful article. It did not require that, in so removing, a useful article remain behind. This allowance, however, does not allow for nothing to be left behind after separation. “[B]ecause the removed feature may not be a useful article … there necessarily would be some aspects of the original useful article ‘left behind’ if the feature were conceptually removed.” Importantly, the Court disposed of the notion that there was any difference between physically and conceptually separating the PGS work from the useful article.

Applying the Star Athletica test to the banana costumes currently at issue, one must first identify what exactly comprises the PGS element to be removed. Here, the banana costume itself is useful as clothing, but it is also the entire PGS work. For example, the lines down the sides of Rasta Imposta’s costume serve dual functions: as structural seams and as design elements. Removing the banana elements from the costume wouldn’t leave behind much, if anything at all. It doesn’t have to, though. Post Star Athletica, the focus is now on what the PGS work would be independent of the useful article, not on whether the leftovers are still useful.

Here, removing the PGS from the useful article might entail closing the openings which allow the costume to be worn: the arm holes, the face hole, and the gap at the bottom that rests around the wearer’s hips. Closing those gaps would remove the utility from the costume and turn it into a sculpture of sorts. The Court did say that some aspects of the original useful article would need to be “left behind,” but that requirement might not be literal. Here, eliminating a person’s ability to wear the costume serves the same function as “leaving behind” the utilitarian aspects that classified it as clothing in the first place. The question now is “how little can you leave behind?”

That the Supreme Court favors conceptual separation means that more artistic-utilitarian merged works may be protectable under copyright law. If physical separation was the standard, the banana costume would not be protectible because there would be no clothing left without the banana elements. This new standard will likely have meaningful implications for industries like fashion, expanding protection for works that at one point did not qualify.

However, Rasta’s copyright could still fall under the weight of a court challenge on other grounds. After all, bananas come from nature and there are only so many ways a person can wear a banana. If it fails, however, it likely won’t be under the Star Athletica test.

New Damages Trial for Apple and Samsung, Questions Still Left Unanswered

Picture1By Alex Hagel

Apple and Samsung are back! A new chapter in the Apple v. Samsung saga is set to begin in May.

A federal judge in California has scheduled a third trial since Apple’s initial suit in 2011. The suit alleges Samsung illegally copied several Apple design patents when designing its own phone. The new trial for the two tech giants follows the Supreme Court’s decision last year, which resulted in a (narrow) victory for Samsung.

This round of Apple v. Samsung involves three Apple design patents related to the front cover of its iPhones. Patent D618,577 covers “a black rectangular front face with rounded corners;” patent D593,087 covers “a rectangular front face with rounded corners and a raised rim;” and patent D604,305 covers “a grid of 16 colorful icons on a black screen.” WJLTA previously wrote about the peculiarities of design patents, and its distinction from the far more common utility patents.

Apple received a $1 billion verdict in 2012 after a jury found Samsung illegally used Apple’s design patents, and awarded Apple the entirety of Samsung’s profits from the sale of the infringing phones. Subsequent appeals affirmed the district court’s decision to award the full value of the phones, but that value was later recalculated to about $399 million.

On appeal to the Supreme Court, Samsung argued Apple was only entitled to the value of the relevant “article of manufacture,” rather than the value of the entire phone. During oral arguments, the parties struggled to articulate how and when an “article of manufacture” should be distinct from the entire product. The United States, as amicus, argued four factors should be considered:

  • the scope of the design claimed in the plaintiff’s patent, including the drawing and written description;
  • the relative prominence of the design within the product as a whole;
  • whether the design is conceptually distinct from the product as a whole; and
  • the physical relationship between the patented design and the rest of the product.

The unanimous opinion refused to adopt a specific test for determining what constitutes an article of manufacture, instead ruling “the term ‘article of manufacture’ is broad enough to encompass both a product sold to a consumer [i.e. an iPhone] as well as a component of that product [i.e. the front casing of an iPhone].”

Which brings us back to the new trial. In her order granting a new trial, the district court judge directed the parties to argue using the above factors articulated by the United States. Samsung will likely argue the front casing is an article of manufacture and thus distinct from the iPhone as a product, because (1) the design claimed in the plaintiff’s patent is limited to the front casing, rather than the entire phone, (2) the prominence of the front design is overshadowed by the capabilities of the iPhone as a “smartphone” (3) the product [a smartphone] is conceptually distinct from the patented “black rectangular front face with rounded corners” and (4) the front cover is separable from the rest of the phone.

This new trial will not likely be the end of the story. If the court accepts Samsung’s argument that the front casing is a distinct “article of manufacture,” any damages the court awards will likely only produce more litigation because there is no clear standard on how to value that “article of manufacture.”

Although valuing an article of manufacture was discussed during oral arguments at the Supreme Court, the justices did not decide the issue, and the district court judge has not offered guidance. The likely candidate, embraced by the government and Samsung at oral arguments, requires companies to use consumer surveys and data to deduce “to what extent people who bought the product did so because of the particular article of manufacture.” In the alternative, the court might adopt a test looking at the relative cost of developing a part and awarding damages in proportion. The court was hesitant to embrace this approach because of the potential for a “eureka!” moment, where an important component of the product is produced in a flash of genius, rather than through extensive research and development. This approach would necessarily value that important component much lower because of the low cost of production.

With this open question hanging over the court, this well-known saga is unlikely to end anytime soon.

Taming the Gerry-Mander: How Technology Can Keep Gerrymandering in Check

181213-004-84DEAB79By Joshua Oh

A politician’s dream is to be re-elected over and over with minimal effort, so where might one look to ensure this? The answer, perhaps, is gerrymandering. Gerrymandering was coined after Massachusetts Governor Elbridge Gerry enacted a law in 1812 to redraw legislative districts to benefit his party, which resulted in one of the redrawn districts resembling a salamander—thus the term “gerrymandering.” In fact, it has been gaining a notorious reputation for its widespread use based on its potentially unfair effects on election results. However, the Supreme Court will soon rule on a case, Gill v. Whitford, that will heavily influence future American elections.

Gerrymandering is without a doubt toxic to American democracy. It allows politicians to choose their voters by “packing”—concentrating one party’s supporters in one district to win overwhelmingly. On the other hand, “cracking” splits up supporters of the opposing party into multiple districts in order to dilute their impact, preventing opponents from securing a majority vote. This essentially means that elections are predetermined and one person’s vote is not necessarily equal to someone else’s vote, which could contravene the Equal Protection Clause of the Constitution.

The Supreme Court has always been reluctant to intervene in partisan areas meant for the political branches of government to debate. Thus, a standard or definition of political fairness in the gerrymandering context had never been set. Gill v. Whitford, an extreme example of partisan gerrymandering in Wisconsin, may soon change that. In 2012, Republican elected officials in Wisconsin were able to draw up a districting plan that permitted their party to win 61% of the Wisconsin Assembly, even though they only received 48.6% of the vote. In 2014, they won 64% of the Wisconsin Assembly, despite receiving only 52% of the vote.

The issue in the Whitford case was whether partisan redistricting could be so extreme as to be unconstitutional. The argument goes that Republican efforts to redistrict caused the dilution of Democratic votes, leading to a non-representative government. By packing and cracking districts, the votes of individual Democrats meant less than those of individual Republicans. The nation’s highest court will soon decide whether these arguments are persuasive.

In ruling on the constitutionality of a given redistricting effort, the Supreme Court could receive valuable assistance from recent technological advances that are equipped to detect gerrymandering. Indeed, algorithms are the latest threat to gerrymandering, as computers can now determine whether districts were drawn with political motivations in mind. Down the road, these algorithms could be used in a court of law in order to challenge unconstitutional gerrymandering. Since courts are demanding that districts be drawn more fairly, these algorithms could be the solution in providing the citizenry a fair and representative democracy that it deserves.

Professor Wendy Cho with the National Center for Supercomputing Applications at the University of Illinois is attempting to create such an algorithm to measure whether political parties manipulated a map to gain an unfair advantage, a term described as a “gerrymandering ruler.” This algorithm would identify the criteria—some even required by law—of redistricting: population equity, contiguity, compactness, and traditional districting principles. Based on these criteria, the algorithm would generate billions of maps that are, by definition, nonpartisan maps, since no political information was considered. These artificial, nonpartisan re-districted maps could then be compared to the districts that had been created by politicians. If the real map does not look like any of the billion possibilities generated by the algorithm, that would provide strong evidence of partisanship motivating the alleged gerrymandering. On the other hand, if the algorithm generated a set of one billion maps with partisan information considered, and the map in question looked similar to any of those billion possibilities, a court could then also infer partisan motivation.

This algorithm is but one possible solution to the toxicity that gerrymandering brings into the election system. It may be beneficial for the courts to be more receptive to technological advances like this one that can better detect and prove partisan bias in gerrymandering. Such extraordinary technology could encourage lawyers to introduce algorithmic evidence into a court of law, allowing the court to better assess cases before them in an objective manner as partisan gerrymandering continues to be a problem in American politics. It can also be a useful way to objectively give a voice to those who have felt that their votes did not matter when their district was always won by a particular party. It would no doubt advance the “one person, one vote” principle that the Constitution demands.

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What To Do About Russian Facebook Trolls?

Picture1By Hugo Fraga

Once again, Facebook is being prodded by state officials—this time from across the pond. Just one month after revealing to Congress that Russian-linked accounts purchased $150,000 worth of political ads during the US election, Facebook is being asked to provide British lawmakers with information on ads purchased by Russian-linked Facebook accounts during last year’s Brexit referendum and during this year’s general election.

Law makers in both the United States and Britain worry that the social media giant is providing a platform for foreign governments to interfere with the democratic process. Up until now, Facebook has not provided enough information to Congress to assuage this worry. For that reason, Congress—and from the looks of it, Parliament as well —is considering a bill that would require political advertisements on social media platforms to disclose who is paying for the advertisement.

This kind of regulation—at least in the U.S.—isn’t new. The Federal Election Commission is charged with ensuring that political advertisements on television and radio reveal the source of their funds and has a similar regulation for radio and television ads. But as it stands now, political advertisers on social media platforms, like Facebook, escape the FEC’s requirement to disclose the source of their funds because such advertisements are considered merely “small items,” and thus are in the same group as, say, buttons and bumper stickers.

However, Congress has introduced a bill entitled “The Honest Ads Act” that could change that. The Honest Ads Act would require social media companies with more than 50 million monthly users to make public detailed information about any political advertiser who spends over $500 on their platforms. Furthermore, it would require social media platforms to take “reasonable efforts” to ensure that any political advertisements or content they display were not purchased by a foreign national.

But some argue that this isn’t enough. Brendan Fischer, director of the Federal Election Commission reform at the Campaign Legal Center, told Wired Magazine that the kinds of advertisements purchased by Russian-linked accounts wouldn’t fall under campaign finance law because none of them included “expressed advocacy”—i.e., a prompt to vote for this or that candidate. And even if Congress expanded the meaning of a bill to include the kind of ads purchased by Russian-linked accounts, there would still be ways around it, like forming a “fake news” website and then posting the ad as an article instead.

Nonetheless, Congress likely realizes that a single bill won’t fix this problem and that there will be ways around any proposed solutions. However, many members of Congress see this bill more as an attempt to regulate what has seemed impossible to regulate: Facebook. And the advantage of that is that people won’t have to rely on Facebook’s internal efforts to solve the problem. After all, when has a company’s self-legislated efforts ever been in favor of the people.

(Don’t) Say My Name

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By Vanessa James

“We’re a company that’s so successful and everywhere you go, you see a scratchy, hairy fastener and you say…

Hey, that’s Velcro.”

So begins the recent Youtube video Velcro released on September 25, 2017. In an effort to protect itself against genericide—an intellectual property term that means the retraction of a trademark because the brand name has become synonymous with the type of product—Velcro released a video pleading with the public to stop saying “Velcro” and start instead saying “hook and loop.”

It may seem innocuous to use brand names to describe products associated with the brand, but this is actually often a red flag that the brand could potentially lose its trademark. For instance, when was the last time you drank from a “vacuum flask,” walked on a “moving staircase,” or went to a “coin laundry shop?”

Velcro, which was first registered as a trademark in 1956, is trying to avoid losing its trademark, as did thermos, escalator, laundromat, yo-yo, aspirin, and pilates. The purpose of a trademark is to uniquely distinguish the goods or services of a company and to help consumers identify the source of a product. When a trademark becomes synonymous with a class of goods, it no longer helps consumers to understand which company made the product. If this happens, the trademark may be cancelled by the U.S. Patent and Trademark Office. Once a trademark is cancelled, the mark can no longer be used to prevent others from using the same mark to describe their products.

One factor courts consider when determining whether a trademark has become generic is whether the owner attempted to educate the public on the proper use of the mark and the generic name for the goods. Enter Velcro’s video. Ad campaigns like Velcro’s have a record of successfully stopping brands from losing their registered trademarks. Campaigns for Xerox (a 2003 advertisement from photocopier firm Xerox read: “When you use ‘Xerox’ the way you use ‘aspirin,’ we get a headache), Jeep, and Band-Aid saved those trademarks from becoming generic.  Johnson & Johnson changed its marketing jingle from “I am stuck on Band-Aids, ’cause Band-Aid’s stuck on me” to “I am stuck on Band-Aids brand ’cause Band-Aid’s stuck on me.”  Chrysler turned to the term “SUV” instead of “Jeep.” The Dow Chemical Company, which makes a well-known “line of extruded polystyrene foam products,” has worked to remind consumers coffee cups are not made of Styrofoam.

Another recent example of a company fighting to save its trademark comes from well-known jewelry chain Tiffany & Co. Tiffany initiated a legal battle with U.S. wholesaler Costco when Tiffany claimed that Costco infringed its trademark by selling “Tiffany” engagement rings. In retaliation, Costco argued that the jewelry firm’s trademark was no longer valid because “Tiffany” had become a generic term for solitaire-style rings. Judge Swain of the United States District Court for the Southern District of New York determined that Costco did in fact infringe on Tiffany’s trademark and awarded Tiffany $11.1 million plus interest in addition to $8.25 million punitive damages. For now, producing a simple, fun Youtube video is far less costly way for Velcro to protect its trademark.

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“Errant text messages cost the Buffalo Bills millions”—the Rise of TCPA Litigation

Blog- Phone ImageBy Craig Dammeier

In April of 2014, the Buffalo Bills settled a two-year federal court case in Florida for a cool $3 million dollars. Their mistake? Sending three more text messages over a 14-day period than a fan had agreed to. Mr. Jerry Wojcik visited the Bills’ website in 2012 and opted-in to receiving promotional text messages limited to “…three to five messages per week for a total of 10 to 12 weeks.” Instead, Mr. Wojcik received six text messages the first week and seven the second week. He subsequently filed a class action suit against the sports franchise alleging violations of the Telephone Consumer Protection Act (TCPA). The settlement agreement was as follows: each eligible class member was entitled to a share of $2.5 million worth of debit cards (only redeemable on the Bills’ website, a “win” for the franchise) and $500,000 in attorney’s fees. And it’s not just the Bills (nor the NFL) that faces this menace. The Tampa Bay Buccaneers and the LA-based Chargers, Clippers, and Lakers have all fallen victim to the heartless TCPA. These teams are being mercilessly-abused over a few extra promotional emails or texts—who will help them survive the night?

The TCPA, passed by the Federal Communications Commission in 1991, was originally intended to protect individuals against unsolicited calls and texts sent to wireless devices (and home phones) by “auto-dialers.” Auto-dialers are automatic telephone dialing systems that use prerecorded or artificial voice messages. The 1991 statute arose over complaints regarding the increased use of auto-dialers, specifically because the called parties could incur significant phone bills as a result of the unsolicited calls. In response, the TCPA provides statutory damages of $500 (for an “innocent” violation) and $1,500 for a willful violation of the statute.

In 2012, a subsequent amendment to the TCPA included text messages and other modern technologies into the statute and further precluded companies from making any call without the prior express consent of the consumer. It also required the companies provide an automated, interactive “opt-out” mechanism which would allow the consumer to stop all future messages. It is under this 2012 amendment that TCPA litigation has seen a historic rise in the court system.

While the statute was originally passed to protect consumer privacy and restrict companies from engaging in unwanted telemarketing communication practices, it has quickly become a favorite weapon of plaintiff’s firms as it creates liability for every company from startups to international banks (not just sports franchises). Furthermore, the Act enables mistreated consumers and their lawyers to collect massive class action settlements. Bank of America settled its TCPA class action for $32 million (the culmination of six pending TCPA litigation matters), HSBC was granted judicial approval of a $40 million settlement in 2015, and Western Union agreed to pay $8.5 million the same year. The potential payout has created a frenzy amongst plaintiff’s firms, with several creating sub-groups that specifically handle TCPA class actions. The rise in TCPA litigation has not gone un-noticed by the Judiciary either: “This is the second multi-million-dollar class action settlement this court has reviewed and addressed in the last three weeks in which the plaintiff class has sued credit card companies for violations of the Telephone Consumer Protection Act.”

In short, the sharks are circling and each bite provides larger and larger settlements for Americans whose consumer rights have been violated (along with attorney’s fees, of course).

Antitrust Implications of Amazon’s Purported New Delivery Service

Amazon-Shopping-in-KenyaBy Gardner Reed

Amazon’s recent acquisition of Whole Foods has renewed the debate surrounding the proper role of antitrust regulation. The traditional approach to antitrust law aims to protect consumers by keeping prices down and quality up. The Whole Foods acquisition, along with the growing dominance of large tech firms such as Google, has helped popularize a new approach to antitrust: “hipster antitrust.” Hipster antitrust widens the objectives of traditional antitrust regulation, not only protecting consumers through fostering competition, but also using antitrust enforcement to attack problems such as economic inequality and environmental degradation. While the Federal Trade Commission promptly approved the Whole Foods acquisition, recent reports that Amazon is developing a delivery service to rival FedEX and UPS may raise a new round of competitive questions and continue the debate surrounding the proper role of antitrust regulation.

To begin, it is important to understand why Amazon’s acquisition of Whole Foods was not an antitrust violation. First, Amazon itself only sells a small amount of groceries and Whole Foods only accounts for two percent of the American grocery market. Second, the grocery market contains far larger and more entrenched competitors, such as Walmart with a twenty percent market share and Kroger with a seven percent share. Third, antitrust regulators, applying the traditional approach to antitrust, believe that fostering competition is the best way to promote low prices and high quality. Because this merger accounted for only a small share of the grocery market, consumers were left with plenty of competitive alternatives whether or not it led to lower prices or higher quality services.

However, recent reports indicate that Amazon is planning to launch a new delivery service similar to FedEX and UPS. According to Bloomberg, project “Seller Flex” began a trial run on the West Coast in 2017 with an expansion planned for 2018. The purpose of the system is to decrease the crowding in Amazon’s warehouses and increase the number of products available through two-day delivery. Under this new system, Amazon will directly oversee the pickup and delivery of packages from the warehouses of third-party merchants who market their items on Amazon.com. Traditionally, when delivering to end consumers, merchants had the choice to ship their products directly through Amazon or to use third-party carriers such as FedEX and UPS. Amazon may still elect to use FedEX and UPS to make deliveries, but merchants will no longer be able to make the decision on their own. Amazon expects that its increased control of the shipping process will allow it to save money through volume discounts, avoiding congestion, and increasing its flexibility.

By drawing comparisons with Amazon’s acquisition of Whole Foods it is possible to identify potential competitive concerns implicated by the new delivery system. The key difference is the amount of competitive power Amazon wields in each market. In the grocery market, Amazon is not an antitrust risk because it is a small player with only a two percent market share, which gives it essentially no ability to affect its competitors’ businesses or the market as a whole. In the e-commerce market, however, Amazon provides an essential platform and acts as a gateway for businesses to reach consumers across the United States. In the past, merchants could participate on Amazon’s platform, but retained the option to select their preference of delivery service. By requiring the use of its own delivery service, however, Amazon will be depriving its merchants of choice. Given Amazon’s power in the e-commerce market, merchants have limited alternatives to Amazon’s platform and thus may have no other realistic option outside of using Amazon’s in-house delivery service. This lack of competition in delivery methods could potentially raise end prices for consumers.

Ultimately, it is too early to predict the competitive effects of Amazon’s delivery service, but different schools of antitrust may reach different conclusions. Consistent with its track record, it is likely that Amazon will do everything in its power to lower prices and offer a better service by integrating delivery into its e-commerce platform. Under these circumstances, a traditional antitrust review would not likely find a problem. A review under “hipster antitrust”, however, may find a problem regardless of the cost or quality outcome. As part of a larger policy matter, such as protecting small businesses, Amazon’s acquisition of more power and the reduction of choice for its merchants may simply be unacceptable. Regardless of the outcome, Amazon’s continued expansion of its operations has all but guaranteed that it will remain a focus of antitrust discussions for the foreseeable future.

Sharing Is Not Always Easy – An Analysis of Sharing Data Between the Public and Private Sectors

Picture1By Isaac Prevost

Traffic data plays an important role for public agencies concerned with traffic management and infrastructure. We’re seeing private companies collect more and more of this data, occasionally resulting in partnerships between governments and those private companies. However, whether these partnerships will stave off an increased interest in regulatory requirements of private data disclosure remains to be seen.

Federal, state, and local governments collect significant traffic data about traffic patterns and use of roadway system. The collection methods used by governmental entities range from interconnected sensors along the road to government employees manually tallying vehicle occupancies. This information is then used to analyze infrastructure needs, improve public transportation routes, and provide real-time traffic information to the public. In recent years however, there has also been a substantial uptick in the amount of traffic data collected by private companies. This is occurring with the prevalence of ride-sharing companies, increasingly-automated cars, and mapping applications such as Google Maps.

So, just how are public transportation agencies utilizing these new sources of data? Waze, a GPS navigation software owned by Google, launched the Connected Citizens Program in 2014 that shares traffic and road information with public entities for free. Agencies that partner with them participate in a two-way exchange of traffic data, giving Waze information on road closures and incidents. This private data supplements the government’s data, providing better information on functions such as the timing of traffic signals or the dispatch of emergency vehicles.

An alternative example of these partnerships can be found between Strava Metro and public agencies, where the agency pays for access to the data. Strava, a popular application for runners and cyclists, gives the public entities access to the their users’ running and cycling routes.  The Oregon Department of Transportation pays $20,000 per year for access to the data. Information from Strava Metro was a factor in the decision to restrict cars from Portland’s Tilikum Crossing bridge. These types of collaborations are just a small sample of how private data is increasingly being used in public planning.

However, even though the voluntary sharing of private data with public entities has become more common, it has not happened without its hurdles. While governments may be eager to use the data that companies like Waze or Strava are willing to share or sell, tensions have arisen when a company like Uber is reluctant to turn over data or withholds certain customer information. A partnership between Uber and the City of Boston in 2015 resulted in underwhelming results because Uber only disclosed the zip codes for the start and end location of an Uber user’s ride. A city official explained that the location information was not specific enough to be useful for urban planning.

Instead of pursuing partnerships, some cities have required data information from ridesharing companies in exchange for their license to operate in the area. In January 2017, the New York City Taxi and Limousine Commission requested all passenger pick-up and drop-off information from ride-sharing companies such as Uber and Lyft. Uber publicly objected to the proposal, citing the privacy of their drivers, but the Commission kept the requirement. The City expressed interest in the value of Uber’s data for traffic planning and analysis, as well as a tool for preventing drivers from working beyond their permitted total of work.

Possibly in an effort to appease regulators, Uber launched Uber Movement this year, which aggregates and anonymizes Uber’s ride data to show the traffic flows of various cities. In their FAQs section, Uber Movement states that the launch of the site was partially due to feedback from government agencies that “aggregated data will inform decisions about how to adapt existing infrastructure and invest in future solutions to make our cities more efficient.” One of their pilot reports tracked how a metro shutdown in Washington D.C. affected travel times in the city. The New York Times labeled this website “an olive branch to local governments.”

Uber Movement formally launched in August. As it gains more and more data on various cities, it could provide an interesting case study: what amount and type of private traffic data are governmental entities hoping to access? Will the availability of this data stave off further local and state regulations? Partnerships between governments and private companies are becoming more and more common, but the success or failure of Uber Movement may provide some insight into what lies ahead for these types of partnerships.

 

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Online Education and Federal Funding: When Is a Class Actually a Correspondence Course?

Picture1By Brittany Taylor

On September 21st, 2017, the Inspector General for the Department of Education released an audit of Western Governors University (WGU), a non-profit, primarily online university that has been using technology to further higher education for twenty years. The Inspector General’s findings indicated that WGU does not provide the “regular and substantive contact” between students and teachers required by The Higher Education Act, making its classes what are called “correspondence courses,” which are ineligible for federal funding. Moreover, the inspector general has recommended that WGU repay all funding received over the last several years, which would total over $712 million. Western Governors University contests these findings vehemently, and supporters of the school have come out of the woodwork to praise the WGU’s unique educational model as well as the above average outcomes its students enjoy.

Online education has been a rapidly changing and growing field, both in high schools and on college campuses. The Higher Education Act, enacted in 1965, has not been updated to account for technological changes in education technology. It also applies outdated rules to modern programs, despite making other updates during reauthorization periods. In the case of WGU, students who (1) watch lectures digitally (sometimes in real time), (2) complete the same assignments as students in a brick-and-mortar classroom, and (3) communicate with professors by phone, email, and assignment feedback, have been found ineligible for federal funding under the same rules that made mail-in correspondence courses of the 1960’s ineligible. Specifically, these types of contacts were not considered “regular and substantive” enough to meet Title IV requirements to receive federal funding for the school. However, the Department of Education has not issued guidelines to assist schools in meeting the “regular and substantive contact” with teachers requirement, according to Jamie Merisotis, director of the Lumina Foundation, leaving institutions like WGU to use their best judgement in attempting to meet it.

One response to these findings is a movement to update the language in the Higher Education Act to better adapt and account for current technology and research regarding what types of education are effective. A house bill has been proposed to help update the statutory and regulatory framework behind online learning. The Advancing Competency-Based Education Act of 2017, HR 2589, is currently receiving bipartisan support and will, if passed, update the Higher Education Act of 1965 language to be more accommodating of modern technology and educational models like WGU’s.

Meanwhile, WGU is awaiting the Department of Education determination regarding these findings. It is entirely possible for the Department of Education to decline to act upon the results of the audit, effectively punting the question to some later date. Even if the audit is not acted upon, though, the findings send a chill through innovative education models that rely upon government funding.

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