Digital Discourse / Archives for Mark MacCarthy

SIIA Responds to Proposed EC Data Protection Regulations

January 25, 2012 By

The European Commission today proposed a comprehensive reform of the EU’s 1995 data protection rules for online privacy. The proposal includes two legislative proposals setting out the Commission’s objectives: a Regulation setting out a general EU framework for data protection, and a Directive on protecting personal data processed for the purposes of prevention, detection, investigation or prosecution of criminal offences and related judicial activities.

SIIA welcomes revisions that would make it easier for global companies to demonstrate compliance with the EU privacy regime, and to ease the administrative burdens. However, we are concerned that the breadth of these proposed regulations threaten the internet economy and impede economic growth and job creation. SIIA looks forward to working with EU oifficials to resolve any concerns about substantive new privacy rules such as the proposed new right to be forgotten and requirements for affirmative consent.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology.

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Filed Under: Policy, Policy - Privacy

APEC Makes Progress on Trans-Pacific Partnership

November 15, 2011 By

Over the weekend, the U.S. worked with its Pacific partners at the Asia Pacific Economic Cooperation meeting in Honolulu to provide significant support for a new Pacific Rim trade agreement.  The leaders announced their acceptance of a framework for the Trans-Pacific Partnership (TPP), a regional free trade agreement comprising the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.  Another important development over the weekend was the announcements by Japan, Mexico and Canada that they were interested in the negotiations. USTR released a fact sheet outlining the negotiating framework.

The agreement would coordinate regulations in the Pacific region and would be the basis for building the rules for international trade and investment in the region for years to come.  This endorsement by the region’s high-level leaders commits them to the success of the TPP initiative. It gives political momentum to the effort to craft a 21st century trade agreement for the region, and raises the hope for a final agreement in 2012.

SIIA members are particularly interested in forward movement on the provisions the U.S. has tabled regarding intellectual property protection and cross-border data flows. SIIA looks favorably at the agreement the U.S. reached with the EU in the area of information and communication technologies (ICT). In particular, SIIA supports the principles on cross-border data flows and local infrastructure and recommends that similar provisions be included in the TPP.

Under the principle on cross-border data flows, governments should not prevent service suppliers of other countries, or customers of those suppliers, from electronically transferring information internally or across borders, accessing publicly available information, or accessing their own information stored in other countries. According to the local infrastructure provision, governments should not require ICT service suppliers to use local infrastructure, or establish a local presence, as a condition of supplying services.

These principles are similar to the ones SIIA, NFTC and other associations recently endorsed on cross-border data flows.  They are needed to ensure that content companies can reach customers and subscribers in different jurisdictions and that the benefits of economic growth, innovation and job creation from ICT services such as cloud computing are fully realized.

SIIA looks forward to working with negotiators from the U.S. and our trading partners to craft a workable agreement on these provisions that will boost trade, investment and jobs in the region.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology.

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Filed Under: Policy, Policy - Intellectual Property Tagged With: , ,

Botnets are Best Addressed with Multi-stakeholder Approach

November 14, 2011 By

Today, SIIA filed comments in the Departments of Commerce and Homeland Security’s proceedings geared toward addressing the problems of botnets and other malware. The harm from malicious software is well known–it can turn computers into elements of a robot network (or botnet), and can be activated by outside entities to launch denial of service attacks, send spam, or harvest personal information. The extent of the problem is hard to quantify, but in the aggregate undoubtedly imposes substantial economic costs on individuals and enterprises.

SIIA’s comments are in response to a process set in motion in September, when the Departments of Commerce and Homeland Security set out to craft a framework to address botnets and malware. The proceeding got a boost in October, when Howard Schmidt, Cybersecurity Coordinator for the Obama Administration, and Cameron Kerry, General Counsel for the U.S. Department of Commerce appeared at an event held by the Center for Strategic and International Studies focused on the need for public/private collaboration in fighting malware.

We endorse the fundamental idea of a voluntary approach, in which the government brings together relevant parties to confer on best practices. Our comments support mult-stakeholder discussions on how the private sector can develop and maintain timely and voluntary programs to detect and notify end-users that their machines have been infected with botnets or other malware and provide mitigation support that will eliminate these infections.  SIIA wants to be part of these ongoing discussions.

Collaboration and cooperation between the public and private sector are key to addressing the problem in a holistic way. Some suggest a government role to subsidize the notification and mitigation efforts needed to clean up infected computers.  In this model, researchers inform network companies (or they become aware through their own traffic monitoring activity) of IP addresses of infected computers on their networks. The network companies communicate with the customer whose computer appears to be infected and offer them a government- sponsored clean-up scheme, which they are entitled to use if they wish. Australia, Japan and Germany provide a collaborative framework that follow this rough model.

In the United States, search engines are already taking steps to warn users that their computers might be infected. In July 2011, Google discovered that some unusual traffic connecting to its search engine was caused by computers infected with a specific strain of malware.  Google responded by displaying a prominent warning at the top of its search results page when it appeared that a user’s computer was infected with this malware.

Despite these efforts, SIIA believes that there would be great benefit from further discussion of collaborative efforts to address this problem. We have several points to further the discussion:

*  A voluntary code of conduct approach is preferable to regulatory intervention.
*  ISPs need to be involved because they have a privileged role in the infrastructure.
*  Other participants should include security firms, search engines and computer services companies.

SIIA welcomes this facilitation role in the case of collaborative efforts to manage the botnet problem.  We urge that the agencies act as the convener and facilitator providing a platform for the airing and discussion of the views of industry, non-governmental organizations, technical experts and international participants.  We also want to make sure that the codes that emerge from this process are voluntary self-regulatory standards, not de facto regulatory mandates.

For further discussion of the general problem of botnets, see Tyler Moore, Richard Clayton, and Ross Anderson Economics of Online Crime, Journal of Economic Perspectives, Volume 23, Number 3, Summer 2009, Pages 3–20. See also Symantec and McAfee, Botnets Demystified and Simplified.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology.

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Filed Under: Policy, Policy - Cybersecurity Tagged With: , , ,

SIIA Joins Call for U.S. Action to Promote Cross-Border Data Flows

November 3, 2011 By

Today, SIIA endorsed principles for promoting cross-border data flows. SIIA joined with the National Foreign Trade Council and other trade associations representing a broad range of U.S. companies in supporting this major business priority. The principles seek to bring to bear the resources of trade law to promote the global flow of data across national boundaries.

American businesses are being harmed by the many barriers inhibiting the flow of data across international borders. Many countries want to impose restrictions on the transfer of data, while others seek to inhibit access by companies or individuals to lawfully available information located outside their jurisdiction. Still others demand that companies provide computing or information services through domestic facilities, in effect requiring localization of plant and equipment.

These practices inhibit economic growth, trade in services, innovation and the free expression of ideas in the global economy. The principles endorsed by SIIA underscore the significance of the problem and encourage the U.S. government to seek remedies in a variety of international organizations. The forums where this problem can be addressed include the World Trade Organization (WTO), Asia Pacific Economic Cooperation (APEC) forum, OECD, and regional trade negotiations such as the Trans-Pacific Partnership.

SIIA’s goal is to have the U.S. government treat these practices as violations of current international rules concerning digital goods, services and information. By joining with the rest of the U.S. business community in endorsing these principles, SIIA is urging the U.S. government to identify these practices as violations of international rules and resolve them through WTO or bilateral consultations.

The principles also address the important issues of intellectual property protection and limitations on liability for internet intermediaries. But rather than reinventing the wheel, the principles reference the approach contained in the Communiqué on Principles for Internet Policymaking related to intellectual property protection and limiting intermediary liability developed by the Organization for Economic Cooperation and Development (OECD) in June 2011.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology.

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Filed Under: Policy, Policy - Cybersecurity Tagged With: ,

SIIA op-ed: Software industry should develop mobile app privacy guidelines, not Congress

October 17, 2011 By

Today, NextGov ran an SIIA op-ed highlighting our view that industry — not Congress — is best positioned to develop effective practices that ensure consumer confidence.

SIIA recently joined an application privacy working group through the Future of Privacy Forum, a Washington think tank. With this group, we are bringing forth the expertise of our member companies to develop voluntary guidelines that will spread best practices to all participants in the industry. In addition, the FPF project website, supported by SIIA and others, makes available a variety of tools to help app developers manage issues of data collection and use.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology.

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Filed Under: Mobility, Policy, Policy - Privacy Tagged With: , ,

The Social Costs of Patent Trolls

September 21, 2011 By

President Obama heralded the patent reform bill’s prospects for stimulating innovation when he signed the bill last week. SIIA concurs. The new law, which represents the first major reform the patent laws in 60 years, makes critical, necessary patent improvements that will drive our country’s continued leadership in the software and information industries. SIIA has continually called for patent reform, and we are pleased to see U.S. patent law move in the right direction. Enactment of the America Invents Act will enhance patent quality and encourage growth in sectors that are poised to create jobs and renew our economy.

While there is no question that the new law is a substantial improvement over the status quo, many fear it might not bring an end to abusive patent litigation that stifles innovation and hinders job growth.

A new study by James Bessen and Mike Meurer on the social costs of patent trolls in the years 2000-2010 sheds some light on the magnitude of the patent troll problem.

They conclude that patent lawsuits from entities that hold patents but do not produce goods or services “are associated with half a trillion dollars of lost wealth to defendants from 1990 through 2010, mostly from technology companies. Moreover, very little of this loss represents a transfer to small inventors. Instead, it implies reduced innovation incentives.”

The idea that patent litigation is creating disincentives for innovation is not new. Bessen and Meurer’s 2008 book, Patent Failure, summarized here, came to a similar conclusion that during the 1990s the net benefits of patents were negative for public companies outside the pharmaceutical and chemical industries. The news is that things did not improve in the first decade of the 21st century.

Abusive patent litigation has been a staple of recent press coverage. An August report by NPR highlighted the problem of unproductive litigation by non-practicing entities. A piece by Timothy B. Lee in the current National Review underscored the same problem. Tech entrepreneur Mark Cuban pointed out in his August blog post that patent litigation risk from non-practicing entities is “unlimited,” which forces companies to set aside resources for patent litigation that would otherwise be used for further investment and job creation. Companies within SIIA report that infringement suits are on the rise, significantly, within the last year. This problem is especially severe for mobile app developers and platforms, leading some offshore app developers to shun the U.S. market for fear of patent infringement suits. Major companies such as Apple, Google and Microsoft are amassing large portfolios of patents to improve their strategic position in the coming patent litigation wars.

The new law will make some improvements. It will allow the U.S. Patent and Trademark Office to keep more of revenue it collects, thereby reducing the problem of bad patents, and it will make it easier to challenge bad patents after they have been granted.

But the new law applies only to new patents, and it does nothing to limit the risk of patent litigation by limiting damages from non-practicing entities. So the problem of abusive patent litigation will likely be with us for some time – along with the social costs outlined in the new Bessen and Meurer study.

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Filed Under: Legislation, Patent, Policy, Policy - Intellectual Property Tagged With: ,

App Platforms and Developers Create Jobs

September 20, 2011 By

Some commentators such as Tyler Cowen opine that social networks and other elements of the online ecosystem are good for mental stimulation and consumer benefits, but not for job creation or economic growth.  Cowen reported that despite having 700 million active users, Facebook had only 1,700 people working for it as of 2010

But Cowen’s conclusion is wrong. For one thing, employment at Facebook is growing very fast – it’s over 2,000 now in 2011. But its importance to the economy, job creation and growth is a function not just of the people it actually employs, but also of the economic activity it makes possible.  A recent study, for example, finds that Facebook generates more than 53,000 jobs at companies that provide apps for Facebook.  A major app developer like Zynga is one source of these jobs, but there are hundreds of other smaller app developers whose employees are focused on providing entertaining and productive apps for the Facebook platform.

But the economic effect doesn’t stop there.  Companies that supply the app developers also create more jobs and those employed at app developers create more jobs through the increase consumer demand that their own spending generates.   Using a standard estimate of these multiplier effects, the Facebook app platform creates as many as 182,000 jobs in other sectors of the economy.  Overall, the Facebook app economy generated as many as 235,000 jobs.  The wages and salaries associated with these jobs amounted to $15.7 billion.

Not bad for Facebook.  But the platforms for apps provided by Google and Apple and RIM also generate employment.   In a time of economic crisis, it is important to remember that the app ecosystem generates economic growth and creates jobs.

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Filed Under: Mobility, Policy, Software Tagged With: , , ,
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