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🥊 Fights you don't know about

Good Monday afternoon. Reporting on fights no one’s talking about this week:
  • Big Tech vs. Maryland.
  • Twitter vs. India.
  • Meghan Markle vs. the Mail.
  • Publishers vs. libraries.

Regulating Big Tech 2.0
Maryland is on the verge of becoming the first state to tax revenue from digital ads, targeting tech giants like Amazon, Google and Facebook.
Let’s unpack. Two years ago, economist Paul Romer wrote an Op-Ed arguing we’re trying to control Big Tech the wrong way.
  • We’re relying too much on antitrust law. This protects us from price gouging, but not other types of harm caused by tech platforms e.g. misinformation, stifling innovation and mass data collection.
  • Romer’s suggestion: create tax legislation that gives Big Tech a monetary incentive to adopt healthier business models.
Maryland took this to heart. Bill Ferguson, president of the State Senate, drew heavily from Romer’s framework when adopting ad revenue tax.
Op-Ed aside, the tax reflects two larger trends. Big Tech profits have soared as the pandemic pushed work, socializing and commerce further online. Cash-strapped states, meanwhile, have struggled with plummeting revenues this year.
  • Ad tax = a way of getting Big Tech to bridge these budget gaps.
But, but, but: Silicon Valley lobbyists argue the tax will be passed on to small businesses that use ads.
High stakes, unclear outcomes. The tax will probs trigger a long, painful legal battle: the largest tech companies aren’t based in Maryland, meaning the law will tax activity originating outside the state – a violation of the Constitution.
Big picture Q: “what is the responsibility of multinational digital platforms to contribute to society’s growth and civic infrastructure?” (WSJ)
Twitter vs. India
Twitter spent last week locked in battle with the world’s largest democracy over the limits of free speech.
The backstory. India has largely blacked out internet and wireless services as thousands of farmers protest new agriculture laws favoring corporate retailers over individual landowners. The Indian government – citing its laws against threats to public order – demanded that Twitter delete 1,100 accounts that have ‘encouraged violence or spread misinformation’.
Although Twitter initially said no, it backed down pretty quickly after the Indian government threatened to jail Twitter employees. 500+ accounts have since been moderated.
  • But: Twitter is refusing to remove accounts of journalists, activists and others that it thinks are appropriately exercising their right to criticize the government.
There are 3 sides to the story.
  • Prime Minister Modi says Twitter is breaking the law.
  • Twitter says India is breaking its own laws.
  • Democracy activists say Twitter shouldn’t roll over and let governments shut down free speech on a whim.
My take: Twitter is on the winning side of this deadlock. An important distinction to make: India’s orders came from a government ministry - not a court. So, technically, India’s demands to remove content didn’t come through the regular rule of law.
Zoom out. Several Indian ministers have joined Koo, an Indian Twitter competitor. Its icon, like Twitter’s, is a bird.
Zoom out x2. @jack is quickly becoming the gatekeeper to free speech worldwide. With social media CEOs making decisions on a situation-by-situation basis, there’s no transparency or consistency in the rules they enforce. Governments are at fault, too. They waited until tech startups blossomed into indispensable behemoths before broaching the question of smart regulation.
A Win for the Duchess
Image: Giphy
Image: Giphy
Meghan Markle has won her privacy case against tabloid paper the Mail on Sunday.
The allegation: the duchess claimed the Mail breached her privacy in 2019 by publishing an extract from a handwritten letter she sent to her father, Thomas Markle, six months earlier. She argued:
  • The letter was private, disclosing intimate thoughts on their rift rather than matters of public interest; and
  • She had a reasonable expectation the contents would remain private.
The defense: the Mail argued any privacy rights Meghan had were (a) limited given the public interest surrounding the Royal Family (b) weakened by her knowledge of her dad’s habit of speaking to the media.
The judgement: Mr. Justice Warby granted Meghan summary judgement i.e. no trial is necessary. He ruled the publication of the letter – which contained “inherently private and personal matters” – was “manifestly excessive and hence unlawful.”
Comme si comme ça. The ruling is good news for Meghan, but tabloid tactics cut deep:
  • “For these outlets, it’s a game. For me and so many others, it’s real life, real relationships and very real sadness,” per Meghan’s statement
Zoom out. Media lawyer Mark Stephens thinks this judgement “puts manacles on the media” and will wreak havoc on the content tabloids can publish in the future.
But… that’s the point – for editors to think profoundly about privacy before rushing to print. As my fave legal journalist Joshua Rozenberg pointed out:
  • “There will still be cases where a newspaper’s freedom of expression outweighs a letter-writer’s right to privacy — especially if the writer is a public figure. But this was not one of them.”
Friend or Foe?
As e-books fly off of virtual shelves, libraries and publishers are locked in a messy tug of war over the way digital books are regulated (spoiler: not very well).
The backstory. Five years ago, e-books occupied a tiny corner of the book industry. In 2016, only ¼ of Americans had read an e-book within the previous year, with most being blissfully unaware their libraries even offered digital books. Overdrive – the digital marketplace for publishers and libraries – was slow, inelegant and outdated.
Fast forward to today. As the pandemic forced libraries to close their doors, physical books started collecting dust. So their sleek, digital counterparts stepped out of the shadows and into their place. Last year, Overdrive surpassed 430 million checkouts – more than double the amount it had in 2016.
  • TL;DR: e-books saved libraries.
But: they’re also hurting them. The laws that govern physical books don’t apply to e-books, so publishers can price digital books however they want. Instead of following an ‘ownership’ model – where libraries pay a fixed cost for a certain number of books – publishers opt for a ‘subscription’ model:
  • E-books are bought via a license that includes a limit on the number of times a book can be checked out and/or the length of time a library holds an edition.
  • The result: libraries pay $40 per copy—compared with the $15 you might pay to buy the same book online.
Publishers PoV: new tech has reduced friction too much; libraries have made it too easy for people to read books without buying them, which eats into publisher revenues. So subscription price hikes are necessary.
Libraries PoV: frictionless library lending actually helps book sales.
The e-book war has been under the radar for a while… but Washington is starting to pay attention.
The House Antitrust Subcommittee launched an investigation into the digital marketplace last year. Alan Inouye, director at the American Library Association, says:
  • “Libraries have almost no rights in the digital age. In the long run, there needs to be a change in the environment or in the game. That means legislation or regulation.”
My take: an ideal solution for e-book regulation is tricky. There’s no middle ground between subscription and ownership that can satisfy both libraries and publishers.
  • US Senate acquits Trump in historic impeachment trial.
  • UK Supreme Court rules Nigerian farmers can sue Shell after decades of oil spills in the Niger Delta region.
  • Robinhood is sued by family of 20-year-old trader who committed suicide after believing he racked up huge losses.
  • UN Human Rights Council condemns Myanmar coup.
  • Biden presses pause on America’s TikTok ban; Oracle presses pause on buying TikTok.
  • Facebook is sued for ‘losing control’ of users’ data.
  • Hong Kong: alarm over proposed law that could ban anyone from leaving.
  • SPAC frenzy: blank-check firms eye deals in Europe’s tech sector.
As weird as 2020 was, it was an exciting year for law.
We think 2021 will be even better, so have put together a collection of essays on where the legal industry is heading this year - covering legal tech to SPACs and everything in between.
Want to see ‘em? Just refer 2 friends to Legit and we’ll send The Future of Law your way.
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