Tag: google

Will Regulations Create Big Marijuana?

I wrote last month that new regulations and taxes in California’s legalized marijuana regime are likely to result in a situation in which

a few people are going to get rich in the California marijuana industry, and fewer small growers are going to earn a modest but comfortable income. Just one of the many ways that regulation contributes to inequality.

Now the East Bay Express in Oakland offers a further look at the problem:

East Bay ExpressAsk the people who grow, manufacture, and sell cannabis about the end of prohibition and you’ll hear two stories. One is that legalization is ushering a multibillion-dollar industry into the light. Opportunities are boundless and green-friendly cities like Oakland are going to benefit enormously. There will be thousands of new jobs, millions in new tax revenue, and a drop in crime and incarceration.

But increasingly you’ll hear another story. The state of California and the city of Oakland blew it. The new state and city cannabis regulations are too complicated, permits are too difficult and time consuming to obtain, taxes are too high, and commercial real estate is scarce and expensive. As a result, many longtime cannabis entrepreneurs are either giving up or they’re burrowing back into the underground economy, out of the taxman’s reach, and unfortunately, further away from the social benefits legal pot was supposed to deliver….

Some longtime farmers, daunted by the regulated market’s heavy expenses, taxes, and low-profit predictions, have shrugged and gone back to the black market where they can continue to grow as they always have: illegally but free of hassle from the state’s new pot bureaucrats armed with pocket protectors and clipboards.

Not all the complaints in the two-part investigation are about taxes and overregulation. Some, especially in part 1, are about “loopholes” in the regulations that allow large corporations to get into the marijuana business and about “dramatic changes to Humboldt County’s cannabis culture, which had an almost pagan worship of a plant that created an alternative lifestyle in the misty hills north of the ‘Redwood Curtain.’”

WSJ on RegulationBut there’s plenty of evidence that regulations are more burdensome on newer and smaller companies than on large, established companies. Indeed, regulatory processes are oftencaptured” by the affected interest groups. The Wall Street Journal confirmed this just yesterday, reporting that “some of the restrictions [in Europe’s GDPR online privacy regulations] are having an unintended consequence: reinforcing the duopoly of Facebook Inc. and Alphabet Inc.’s Google.”

Feds Should Ask Tech Innovators to Seek Forgiveness, Not Permission

A fleet of driverless cars designed by Waymo, a project of Google’s parent company, Alphabet, is on the roads of Phoenix, Arizona. Last week, Waymo CEO John Krafcik announced that in the coming months the driverless cars will be part of the world’s first autonomous ride-hailing service. The recent news is a milestone in driverless car technology history, and it’s no exaggeration to claim that the technology behind these new cars has the potential to save hundreds of thousands – if not millions – of lives in the coming decades. Sadly, drones, another life-saving technology, have had a tougher time getting off the ground.

Waymo’s cars are not suddenly arriving on the scene. Google has been working on getting a driverless car on the road since 2009, and Waymo has been offering some lucky passengers in the Phoenix area rides since April. However, these cars had a driver at the wheel, just in case. The fleet now driving in Phoenix does not include safety drivers. 

This may prompt unease among some Phoenix residents. A clear majority of Americans are uncomfortable about getting into driverless cars. Yet human drivers are deadly. More than 90 percent of car crashes can be attributed to human error, and motor vehicle accidents killed an estimated 40,200 people on American roads last year.

The Foot in the Door on Internet Speech Regulation

Campaign finance has captured Congress’s attention once again, which rarely bodes well for democracy. Senators Amy Klobuchar, Mark Warner, and (of course) John McCain have introduced the Honest Ads Act. The bill requires “those who purchase and publish [online political advertisements]to disclose information about the advertisements to the public…”

Specifically, the bill requires those who paid for an online ad to disclose their name and additional information in the ad itself or in another fashion that can be easily accessed. The bill takes several pages to specify exactly how these disclosures should look or sound. The bill also requires those who purchase $500 or more of ads to disclose substantial information about themselves; what must be disclosed takes up a page and a half of the bill.

The Federal Election Commission makes disclosed campaign contributions public. With this bill, large Internet companies (that is, platforms with 50 million unique visitors from the United States monthly) are given that task. They are supposed to maintain records about ads that concern “any political matter of national importance.” This category goes well beyond speech seeking to elect or defeat a candidate for office.

Why does the nation need this new law? The bill discusses Russian efforts to affect the 2016 election. It mentions the $100,000 spent by “Russian entities” to purchase 3,000 ads. The bill does not mention that Mark Penn, a former campaign advisor to Bill and Hillary Clinton, has estimated that only $6,500 of the $100,000 actually sought to elect or defeat a candidate for office. It also omits Penn’s sense of perspective:

Hillary Clinton’s total campaign budget, including associated committees, was $1.4 billion. Mr. Trump and his allies had about $1 billion. Even a full $100,000 of Russian ads would have erased just 0.025% of Hillary’s financial advantage. In the last week of the campaign alone, Mrs. Clinton’s super PAC dumped $6 million in ads into Florida, Pennsylvania and Wisconsin.

Antitrust for Fun and Profit: The Democrats’ Better Deal (Part 3)

This continues Part 1 and Part 2 of my critique of the arguments for aggressive antitrust activism offered in Steven Pearlstein’s Washington Post article, “Is Amazon Getting Too Big,” which is largely based on a loquacious law review article by Lina Kahn of the Google-funded “New America” think tank. 

My previous blogs found no factual evidence to support claims of Pearlstein and Kahn that many markets (which must include imported goods and services) are becoming dominated by near-monopolies who profit from overcharging and under-serving consumers.  

Yet the wordiest Kahn-Pearlstein arguments for more antitrust suits against large tech companies are not about facts at all, but about theories and predictions.

The Fatal Conceit of the “Right to be Forgotten”

Intelligence Squared hosted a lively debate last week over the so-called “Right to be Forgotten” embraced by European courts—which, as tech executive Andrew McLaughlin aptly noted, would be more honestly described as a “right to force others to forget.”  A primary consequence of this “right” thus far has been that citizens are entitled to demand that search engines like Google censor the results that are returned for a search on the person’s name, provided those results are “inadequate, irrelevant, or no longer relevant.”  In other words, if you’re unhappy that an unflattering item—such as a news story—shows up as a prominent result for your name, you can declare it “irrelevant” even if entirely truthful and ask Google to stop showing it as a result for such searches, with ultimate recourse to the courts if the company refuses.  Within two months of the ruling establishing the “right,” the company received more than 70,000 such requests.

Hearteningly, the opponents of importing this “right” to the United States won the debate by a large margin, but it occurred to me that one absolutely essential reason for rejecting this kind of censorship process was only indirectly and obliquely invoked.  As even the defenders of the Right to be Forgotten conceded, it would be inappropriate to allow a person to suppress search results that were of some legitimate public value: Search engines are obligated to honor suppression requests only when linking some piece of truthful information to a person’s name would be embarrassing or harmful to that person without some compensating benefit to those who would recieve the information.  Frequent comparison was made to the familiar legal standards that have been applied to newspapers publishing (lawfully obtained) private information about non-public figures. In those cases, of course, the person seeking to suppress the information is typically opposed in court by the entity publishing the information—such as a newspaper—which is at least in a position to articulate why it believes there is some public interest in that information at the time of publication. 

Google Co-Founders Sergey Brin & Larry Page: Health Care Regulation Is Blocking Innovation

At a forum sponsored by Khosla Ventures, Google co-founders Sergey Brin and Larry Page discussed the burden of health care regulations in the United States. When asked, “Can you imagine Google becoming a health company?”, Brin responded:

Health is just so heavily regulated, it’s just a painful business to be in. It’s just not necessarily how I want to spend my time. Even though we do have some health projects, and we’ll be doing that to a certain extent. But I think the regulatory burden in the U.S. is so high that I think it would dissuade a lot of entrepreneurs.

Page agreed:

I am really excited about the possibility of data also to improve health. But I think that’s what Sergey’s saying. It’s so heavily regulated, it’s a difficult area…I do worry, you know, we kind of regulate ourselves out of some really great possibilities.

But surely, the United States does not have government-run health care.

The discussion begins at about 29:00.

E-Mail Privacy Laws Don’t Actually Protect Modern E-mail, Court Rules

In case further proof were needed that we’re long overdue for an update of our digital privacy laws, the South Carolina Supreme Court has just ruled that e-mails stored remotely by a provider like Yahoo! or Gmail are not communications in “electronic storage” for the purposes of the Stored Communications Act, and therefore not entitled to the heightened protections of that statute.

There are, fortunately, other statutes barring unauthorized access to people’s accounts, and one appellate court has ruled that e-mail is at least sometimes protected from government intrusion by the Fourth Amendment, independently of what any statute says. But given the variety of different types of electronic communication services that exist in 2012, nobody should feel too confident that the courts will be prepared to generalize that logic. It is depressingly easy, for example, to imagine a court ruling that users of a service like Gmail, whose letters will be scanned by Google’s computers to automatically deliver tailored advertisements, have therefore waived the “reasonable expectation of privacy” that confers Fourth Amendment protection. Indeed, the Justice Department has consistently opposed proposals to clearly require a warrant for scrutinizing electronic communications, arguing that it should often be able to snoop through citizens’ digital correspondence based on a mere subpoena or a showing of “relevance” to a court.

The critical passage at issue in this case—which involves private rather than governmental snooping—is the definition of “electronic storage,” which covers “temporary, intermediate storage of a wire or electronic communication incidental to the electronic transmission thereof” as well as “any storage of such communication by an electronic communication service for the purposes of backup protection of such communication.” The justices all agreed that the e-mails were not in “temporary, intermediate” storage because the legitimate recipient had already read them. They also agreed—though for a variety of reasons—that the e-mails were not in “backup” storage.

Some took this view on the grounds that storage “by an electronic communication service for the purposes of backup protection” encompasses only separate backups created by the  provider for their own purposes, and not copies merely left remotely stored in the user’s inbox. This strikes me as a somewhat artificial distinction: why do the providers create backups? Well, to ensure that they can make the data available to the end user in the event of a crash. The copy is kept for the user’s ultimate benefit either way. One apparent consequence of this view is that it would make a big difference if read e-mails were automatically “deleted” and moved to a “backup” folder, even though this would be an essentially cosmetic alteration to the interface.

Others argued that a “backup” presumed the existence of another, primary copy and noted there was no evidence the user had “downloaded” and retained copies of the e-mails in question. This view rests on a simple technical confusion. If you have read your Gmail on your home computer or mobile device, then of course a copy of that e-mail has been downloaded to your device—otherwise you couldn’t be reading it. This is obscured by the way we usually talk: we say we’re reading something “on Google’s website”—as though we’ve somehow traveled on the Web to visit another location where we’re viewing the information. But this is, of course, just a figure of speech: what you’re actually reading is a copy of the data from the remote server, now residing on your own device. Moreover, it can’t be necessary for the user to retain that copy, since that would rather defeat the purpose of making a “backup,” which is to guarantee that you still have access to your data after it has been deleted from your main device! The only time you actually need a backup is when you don’t still retain a copy of the data elsewhere.

Still, this isn’t really the court’s fault. Whether or not this interpretation makes sense, it at least arguably does reflect what Congress intended when the Stored Communications Act was passed back in 1986, when there was no such thing as Webmail, when storage space was expensive, and when everyone assumed e-mail would generally vanish from the user’s remote inbox upon download. The real problem is that we’ve got electronic privacy laws that date to 1986, and as a result makes all sorts of distinctions that are nonsensical in the modern context of routine cloud storage. Legislation to drag the statute into the 21st century has been introduced, but alas, there’s little indication Congress is in much of a rush to get it passed.

Pages