The Internet & The Market: Reading Assignments

Spring 2003

Part I:  Getting Oriented

1. Introduction

  1. Reading

    1. A. Michael Froomkin, The Internet as a Source of Regulatory Arbitrage, (book chapter) in Borders in Cyberspace (Brian Kahin and Charles Nesson, eds.) (MIT Press, 1997)
    2. J. Bradford Delong & A. Michael Froomkin, Speculative Microeconomics for Tomorrow's Economy (book chapter) in Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property 6 (Brian Kahin & Hal Varian, eds., 2000).
  2. OPTIONAL Reading

    May be useful if this is your first class on Internet issues
    1. Findings of fact in ACLU v. Reno, 929 F. Supp. 824 (E.D.Pa. 1996)
    2. Michael Froomkin, An Introduction to the "Governance" of the Internet
  3. Doing:

    1. Read the class policies
    2. Subscribe to the from the account you want to use to post to the mailing list. Click here to send that email.
    3. Figure out how to make your e-mail program automatically attach a "signature block" or ".sig" to each of your messages. Please ensure that you sign your name to all but intentionally anonymous postings to the class list.
    4. Send me an email (not to the list!) in which you tell me about a paragraph's worth about yourself. Please also include your day & evening phone numbers and both e-mail and relatively lasting postal mail addresses for my files. Your email should demonstrate your mastery of the "signature block" above.
    5. Go to the Internet Skills Page and do at least two things from each of the first four categories.  [If you took "Internet and the State" last semester - do different ones this time plus some of the advanced ones.]
  4. Thinking

    1. Much of the study of e-commerce law consists of doing two very different kinds of things:
      1. Learning about new technologies in order to identify what legal issues they may pose.  Quite often, this exercise requires a fairly sophisticated understanding of both the technologies and the relevant markets, and involves dealing with non-legal materials.
      2. Learning about courts', legislators', commentators' and lobbyists' efforts to cope with legal aspects of new technologies. This will seem more familiar.  As we will see, these efforts tend to fall into one or more of the following categories (Which category things fall into is often controversial, sometimes with reason):
        1. Categorization: Figuring out which of our existing legal categories best covers this new -- or perhaps only seemingly new -- phenomenon.
        2. Strategic behavior: Taking advantage of the new (or, more commonly, seemingly new) invention to promote a new legal rule to displace an existing legal rule.
        3. Invention (rare): Attempting to craft a new rule to deal with something genuinely new.
    2. One of the foundational ideas driving the organization of this course is that it is impossible to do either of these two basic tasks task well without understanding the technologies at issue. This course assumes only a basic knowledge of the Internet -- how to use email and a browser. Those skills, and a large reading list, will provide the rest....

2.  Introduction to Information Policy and Digital Intellectual Property (IP)

  1. Reading

    1. Roger Clarke, "Information Wants to be Free"
    2. Keith W. Porterfield, Information Wants to be Valuable:
    3. Mike Godwin, Coming Soon: Hollywood Versus the Internet (Dec. 18, 2001)
    4. Jeffrey Benner,, Is Amazon's Honor Plan Honorable? (Feb. 6, 2001)
    5. Ann Carrns, Wall St. J., AMA Moves to Fight the Posting of Its Price Codes on the Internet (Aug. 25, 2000)
    6. Tim O'Reilly, Lessons from open-source software development, 42 Comm. ACM 32 (1999) [link may only work from computers located at subscribing institutions]
    7. A. Michael Froomkin, The Collision of Trademarks, Domain Names, and Due Process in Cyberspace, 44 Comm. ACM 91 (2001) [link may only work from computers located at subscribing institutions]
    8. Jennifer 8. Lee, New York Times, Dirty Laundry Online for All to See (Sept. 5, 2002)
  2. Doing

    1. Look at the terms of service and privacy policies of the University of Miami web sites and whatever other web site you use the most.   Be prepared to discuss similarities and differences.
  3. Thinking

    1. When is it ok to copy software? Books? Movies?
    2. Who owns (should own?) information about you?  Do you know? Do you care?  Why?
    3. Which extreme is more frightening: a world where no data at all can be copied without payment/authorization/record-keeping, or one of information anarchy where no one can be prevented from sharing data at will?
    4. Larry Lessig argues in perhaps the best-known book on cyberspace legal issues that "Code is Law".  To what extent does the way things are coded define outcomes?  Or does it just define options?  
    5. Does the "power of code" (if it exists) defeat government regulation, or enhance it by providing another thing that governments can regulate?
    6. The trademark law example is one of the (in my opinion) relatively few areas in which the existence of the Internet seriously undermines existing legal categories.   Can you think of others?  Is regulatory arbitrage one of them -- or not?  Is the easy copying of digital IP another example?

3. Introduction to E-commerce

  1. Reading

    1. Some Sample Business Models
      1. Don George,, Captain Kirk's Secret (July 14, 2001) and Ira Carnahan,, The Economics of Priceline and what Priceline says about the American economy, (May 19, 2000)
      2. The Economist, Visible Hand (Sept. 18, 1999) and NexTag, Help for First-Time Visitors
      3. Kevin Sutehall, Developments in Banking Law VII: Electronic Banking, 21 Annual Review of Banking Law 58 (2002)
      4. John Schwartz, New York Times, From Unseemly to Lowbrow, the Web's Real Money Is in the Gutter (Aug. 26, 2002)
      5. Voyeur Dorm v. City of Tampa, 265 F.3d 1232 (11th Cir. 2001) (westlaw version)
      6. Walter S. Mossberg, Wall St. J., Real Consumer Choice Has Been Early Victim In Battle of the Titans (Aug. 2, 2001) (westlaw)
      7. Keith Regan, E-Commerce Times, Amazon's Tough-Love Privacy Policy (Sept. 6, 2000) &, Privacy Notice
    2. Price (and other) Discrimination
      1. Thomas Heath, Washington Post, Capitals Owner Puts Pittsburgh Fans on Ice (Apr. 14, 2001) (2001 WL 17620672)
      2. Linda Rosencrance, Amazon charging Different Prices on some DVDs (Sept. 5, 2000)
      3. Florian Zettelmeyer, Fiona Scott Morton & Jorge Silva-Risso, Cowboys or Cowards: Why are Internet Car Prices Lower? (Oct. 2001) (abstract only)
      4. Fiona Scott Morton, Florian Zettelmeyer, & Jorge Silva-Risso, Consumer Information and Price Discrimination: Does the Internet Affect the Pricing of New Cars to Women and Minorities? (Sept. 2001) (abstract only)
      5. Hal R. Varian, New York Times, Online Sales Offer Fresh Look at Economy (Dec. 19, 2002)
    3. Sample Hazards
      1. Matt Gallaway, Business 2.0, Amazon's Privacy Woes (Dec. 12, 2000)
      2., Schwab Online Breaks Down (Feb. 24, 1999) 
      3. John Schwartz and Bob Tedeschi, New York Times, New Software Quietly Diverts Sales Commissions (Sept. 27, 2002)
  2. Optional reading  [not included in your packet - on reserve in the library]

    1. Mark S. Nadel, The Consumer Product Selection Process in an Internet Age: Obstacles to Maximum Effectiveness & Policy Options, 14 Harv. J.L. & Tech. 183 (2000).  Updated 2001 version can be downloaded at SSRN.
    2. Voyeur Dorm L.C. v. City of Tampa, FL, 121 F.Supp.2d 1373 (M.D.Fla. 2000) (westlaw),rev'd 265 F.3d 1232 (11th Cir. 2001).
    3. Saul Hansell, A Front-Row Seat as Amazon Gets Serious (May 20, 2001)
    4. Reuters, Amazon apologizes for random price test (Sept. 28, 2000)
    5. Blaise Cronin & Elisabeth Davenport, E-Rogenous Zones: Positioning Pornography on the Internet, 17 The Information Society 22 (2001) [not online]
    6. Read the full text of the two Florian Zettelmeyer, Fiona Scott Morton &  Jorge Silva-Risso articles above 
  3. Doing

    1. Look up today's  Priceline Stock Quote -- and then trace its historical performace. Is this performance consistent with what we read about Priceline?
  4. Thinking

    1. To what extent do the various strategies motivating these merchants depend on the public not being aware of all or part of what the merchant is doing?
    2. For each of the readings, imagine you are approached by a person who didn't get something they wanted, or thinks someone else got a better price or a better deal, or thinks the merchant shouldn't be allowed to do that..
      1. Any legal grounds for either an individual or a class action claim?
      2. If not, is new legislation or regulation needed?  If so, who should solve the problem?  Should these new rules be state, federal, or international?

4. Digression: Totally "E" Commerce?

  1. Reading

    1. Elizabeth Kolbert, The New Yorker, Pimps and Dragons (May 28, 2001) [Links to this article have a tendency to die.  Can you figure out why?]
    2. Edward Castronova, Virtual Worlds: A First-hand Account of market and Society on the Cyberian Frontier (Dec. 2001) (I have given you the short version in the packet.  Here is a link to the long version.)
    3. Licences
      1. Everquest End User License Agreement 
      2. Ultima Online License Agreement
    4. Out of band sales
      1. Matt Slagle, AP, Bucks for Bytes: Gamers Buy, Sell Virtual Characters (May 24, 2002)
      2. Player Auctions Web Site 
      3. 60 Warrior!
      4. Sandy Brundage,, - Safe Haven for MMORPG Players? (Nov. 10, 2000)
      5. Greg Sandoval,, Sony to ban sale of online characters from its popular gaming sites  (Apr. 10, 2000)
      6. David Becker,, Game Exchange Dispute Goes to Court (Feb. 7, 2002)
    5. Rules
      1. Ultima Online Service Rules of Conduct
      2. Utlima Online: Purchasing and Owning A House
      3. Utlima Online: Secure House Trading
    6. Cheating
      1. Utlima Online: How Do I Know What is "Legal" in UO?
      2. Utlima Online: Exploitation
      3. Utlima Online: Scam Prevention
      4. David Becker,, Online Gaming's Cheating Heart (June 7, 2002)
    7. Edward Castronova, On Virtual Economies (July 2002) [pages 1-5, 23-36]
    8. Michelle Levander, Time Magazine, Where Does Fantasy End? (June 4, 2001)
  2. Thinking

    1. How long until Ultima Online introduces its version of the UCC?
    2. Thor78 has spent hours accumulating powerful magical goods in EverQuest, which Thor78 planned to sell on Flea-Bay to raise money for a parental wedding anniversary gift.  Flea-bay has stopped sales of EverQuest items at Sony's request, pointing to its policy of "removing items for sale that are identified as intellectual property that is being unlawfully sold."  Thor78 wants to sue someone and HURT them.  Has she got a valid claim against anyone?
    3. EverQuest's owner, Sony, objects to out-of-game trading of characters and objects.  In contrast, Ultima Online allows the trading of characters and even has a form people can use to record the conveyance of a character. What are the advantages and disadvantages of these strategies?  
    4. Alice swindled Bob out of valuable magic items in Ultima Online.  Can Bob sue Alice in state court?  
    5. Carol killed Ted's super-Elf in violation of the Everquest rules.  Can Ted sue in state court?
    6. David sold a Ring of Great Power to Ed via E-bay for $1400.  It turns out the ring is a dud.  Does Ed have any recourse?
    7. To what extent are MMORPG's [Massively Multiplayer Online Role-Playing Games] 
      1. labs for e-commerce experiments
      2. sources of new wealth
      3. different from "meatspace" in ways that make their behavior only a curiosity

5. Introduction to E-Fraud

  1. Reading

    1. National White Collar Crime Center & FBI,  IFCC 2001 Internet Fraud Report (pp. 3-11 & 15-20) 
    2. IFCC, Nigerian Letter Scams (Dec. 18, 2002)
    3. Hal R. Varian, New York Times, Managing Online Security Risks (June 1, 2000)
    4. Organisation for Economic Co-operation and Development (OECD), Recommendation of the OECD Council Concerning Guidelines for Consumer Protection in the Context of Electronic Commerce (1999)
    5. SEC v. Colt, Complaint (Mar. 2, 2000)
    6. Compare SEC v. SG Ltd., 142 F. Supp. 2d 126 (D. Mass. 2001) (Westlaw verison), with SEC v. SG Ltd. 265 F.3d 42 (First Cir. 2001) (Westlaw version)
    7., Password Recovery
    8. Yougu Yuan, Eileen Zishuang Ye & Sean Smith, Web Spoofing 2001 (July 2001)
  2. Optional

    1. Funny -- Anti-419 scam games at Quatloos 
    2. Brendan I. Koerner,, The Nigerian Nightmare (Oct. 22, 2002)
    3. Todd S. Corey, Catching On-line Traders in a Web of Lies: The Perils of Internet Stock Fraud (May, 2001)
    4. Jonna Glasner,, They Price Laundered Money (June 1, 2000)
    5. SEC, Top Ten DotCons (Oct. 30, 2000)
    6. FTC, Bureau of Consumer Protection, Consumer Protection in the Global Electronic Marketplace: Looking Ahead (Sept. 2000) (long)
    7. SEC v. Donald Allen English (E-biz), Complaint (Jan. 31, 2001); Emergency Motion to Modify Freeze Order (Jan 31, 2001)
  3. Doing

    1. Try the Web Spoofer Demos
  4. Thinking

    1. What, if anything, do the OECD Guidelines require anyone to do?  Do the OECD Guidelines differ in any way from current US law and practices?
    2. Are Internet frauds likely to be any different than garden-variety frauds?  How?
      1. If there is a difference, what if anything can be done about it?
      2. Might Internet-based frauds require special regulation even if they are basically just the same old thing, or are existing rules and techniques likely to be sufficient?
      3. Does your analysis of the problems and solutions change much  if the parties are in different countries?
      4. Are Internet users more likely to be susceptible to fraud online than in other parts of their lives?  Less likely?  Why?
    3. How security conscious are you when you use the Internet?
    4. Imagine some malicious uses for the password recovery product and the Web Spoofer.
    5. How does one tell a fraud from a toy or the next Big Thing?

6. Some Other Perspectives

  1. Reading

    1. A. Michael Froomkin, The Death of Privacy?, 52 Stan. L. Rev. 1461 (2000) (edited, shorter, version in packet)
    2. J.D. Lasica, Online Journalism Review, Search Engines and Editorial Integrity (July 23, 2001)
    3. Mitchell L. Moss & Anthony M. Townsend, 16 The Information Society 35, The Interent Backbone and the American Metropolis (2000)
    4. Joan T.A. Gabel & Nancy Mansfiled, On the Increasing Presence of Remote Employees: an Analysis of the Internet's Impact on Employment Law as it Relates to Teleworkers, 2001 J. L. Tech. & Pol'y 233 (Westlaw)
    5. Lawrence H. Summers, Tax Administration in a Global Era (July 10, 2000) 
    6. Arthur J. Cockfield, Designing Tax Policy for the Digital Biosphere: How the Internet Is Changing Tax Laws, 34 Conn. L. Rev. 333 (2002) (Westlaw) [pages 333-46, 351-52 & 359-80]
  2. Optional

    1. Pamela Samuelson, Five Challenges for Regulationg the Global Information Society
    2. Luz E. Nagle, E-Commerce in Latin America: Business and Legal Challenges for Developing Enterprise, 50 Am. U. L. Rev. 859 (Spring 2001)  (should be available from Am. U. L. Rev. soon)
    3. Jukka Heinonen, The Warsaw Convention Jurisdiction and the Internet, 65 J. of Air L. & Comm. 453 (2000) (westlaw)
    4. Helen Nissenbaum, Securing Trust Online: Wisdom or Oxymoron?, 81 B.U.L. Rev. 635 (2001) 
  3. Thinking

    1. In what ways does the Internet change the marketplace?
    2. In what ways are consumers empowered? Dis-empowered?  Which is greater?
    3. What sort of spill-over effects to 'meatspace' might one be concerned about from these effects?
    4. Other than whatever "embarrassment" may caused by having facts about oneself known to others, are there any other genuinely harmful effects from a "loss of privacy"?  To what extent if any should the law protect the (too easily?) embarrassed?
    5. Isn't Scott McNealy basically right?
    6. In my 'regulatory arbitrage' article I argued that the Internet would not mean the end of taxes.  But it seems it may mean a substantial change -- what sort?
    7. Consider 42 U.S.C. sec 12181(7), which defines "public accommodation" for purposes of the federal Americans with Disabilities Act:
      (7) Public accommodation The following private entities are considered public accommodations for purposes of this subchapter, if the operations of such entities affect commerce--
      (A) an inn, hotel, motel, or other place of lodging, except for an establishment located within a building that contains not more than five rooms for rent or hire and that is actually occupied by the proprietor of such establishment as the residence of such proprietor;
      (B) a restaurant, bar, or other establishment serving food or drink;
      (C) a motion picture house, theater, concert hall, stadium, or other place of exhibition or entertainment;
      (D) an auditorium, convention center, lecture hall, or other place of public gathering;
      (E) a bakery, grocery store, clothing store, hardware store, shopping center, or other sales or rental establishment;
      (F) a laundromat, dry-cleaner, bank, barber shop, beauty shop, travel service, shoe repair service, funeral parlor, gas station, office of an accountant or lawyer, pharmacy, insurance office, professional office of a health care provider, hospital, or other service establishment;
      (G) a terminal, depot, or other station used for specified public transportation;
      (H) a museum, library, gallery, or other place of public display or collection;
      (I) a park, zoo, amusement park, or other place of recreation;
      (J) a nursery, elementary, secondary, undergraduate, or postgraduate private school, or other place of education;
      (K) a day care center, senior citizen center, homeless shelter, food bank, adoption agency, or other social service center establishment; and
      (L) a gymnasium, health spa, bowling alley, golf course, or other place of exercise or recreation.
      Is an e-commerce web site for an auction house or an airline a "public accommodation" subject to the ADA? (Cf. Access now v. Southwest Airlines Co., 2002 WL 31360397 (S.D. Fl. 2002) for one answer.)

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To Part 4
To Part 5

To Syllabus Index
To Class Policies

Last modified: Dec. 19, 2002