Online Competition and Offline Democracy

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Consumer Choice and Competition Law are devilishly heavy in terms of choice of literature, from the side of law as well as economics, and a collection of all books on the subject together can easily be used to create a specialised two floor (at least) library of its own. (which I would love, if I might add. :-))

The topic being so generic in phrase, it continues to evolve and grow as our own economy and society evolves and grows with every passing year, with the question of choice (and the use of Game Theory) continuously intriguing at every level of society and economy.

The next level of evolution of human society, after the invention of the modern internet (world wide web), has been its swift amoebic growth into the very fabric of our daily lives, and it is the consequence of this growth from a competition law perspective that Ariel Ezrachi and Maurice Stucke claim they look into and answer through their book Virtual Competition. They even go so far as to say in a blog post (and they may quite well be right) that the intertwining of A.I. and the internet into our daily lives has the ability to completely alter our thought process, including politically, and turn the definition of “Democracy” totally upside down.

Obviously, a self – confessed internet economy growth buff like me is more than eager to read the book (It’s available on Amazon India and not even very expensive, though the delivery charge sucks.) The Wall Street Journal already published a book review on it. And once I finish it, we should have one here as well. 🙂

 

 

 

Book Review: The Master Switch by Tim Wu.

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(This is actually an old article which was originally published on the India Law and Technology Blog, where once upon a time I was a regular guest blogger. Unfortunately, sometime back all of them got wiped out. I often get messages about those posts, but sadly many of them were typed directly on the wordpress platform. Hence, no copy and as a consequence, permanently lost. Fortunately, while rummaging for something else, I chanced upon one of my earlier posts from the days when I still preferred to type a word draft first.)

At the very outset, I must confess, I have never been an absolute supporter of network neutrality and still am not. Another writer on this Blog has written before that he feels that the internet is inherently discriminatory, and I am inclined to agree with him. The writer of that post has summarized the reasons why the subject has become such a debatable issue among the learned, yet one can find that the subject has failed to convincingly grip the imagination and attention of the general pubic. And the various research papers and articles written and published in various journals of repute by the proponents of network neutrality are in the writers personal opinion, often too complex and long to enlighten and help an average reader to engage in an active debate on the topic. (After all, few individuals, except for law students or lawyers, will take the pains to read a seventy seven page article in the Harvard Journal of Law and Technology!!)

Notwithstanding what has been written above, THE MASTER SWITCH by Tim Wu is a welcome change to such articles. It is everything that should be asked of a book on a policy issue: Concise, simple, interesting so as to be able to grasp the attention of the reader, and most importantly, synchronized with itself, i.e., all the chapters within it. It also helps to better justify his stand as a proponent of network neutrality by using the “destruction of innovation” argument, which he failed to adequately explain in his papers and which has often been made into the weak link in the armour to be exploited by the those not in favour of network neutrality.

To summarise, he has used the Schumpetarian cycle of “destructive creation” to try and justify why there is a need to enact a Network Neutrality Legislation. He shows through historical examples how each new innovative medium of communication, from the Telegraph to the Television, has over time, though born as an innovative new and “free” medium to communicate, has slowly been centralized and been absorbed to be manipulated and controlled by the few large corporations who have eventually come to dominate the American industry and even Government policy. He then talks about how the Internet is a medium far more revolutionary then any of its communication predecessors and hence, any centralization of this medium shall, in fact result, in an unacceptable loss of freedom of expression.

After reading the book, one begins to understand that the reason a Network Neutrality Legislation needs to be enacted is not with the de jure intention of necessarily keeping the internet neutral, but with the de facto intention of actually controlling corporations from gaining too much control over the medium. A question which arises at this point is “why do we need a specific legislation? Why is the FTC (or, in India’s case, the CCI) not enough to control such an abuse of dominance, should it ever arise?” Wu answers this question, by again, citing historical examples on how these corporations have, through their clout, managed to subvert or walk around such Anti – Trust procedures through effective and efficient lobbying in the U.S. Congress. Despite its lack of effectiveness though, it is interesting to see how Anti – Trust law can act as an effective tool to against network discrimination.

If a complaint has to be raised against the book, it would be that for some reason it lacks any mention whatsoever of Facebook, which is quite surprising considering the status and clout which the site has achieved to influence individual opinion in our times. However, after reading, I must confess, I am far more convinced for the need for specific legislation on network neutrality than I was before.

As a post script, for all those interested in understanding the issue of network neutrality in simple language devoid of most technicalities, I recommend the following essay by Edward W. Felten:

http://dreadedmonkeygod.net/home/attachments/neutrality.pdf