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Challenge is to come up with smart internet regulations: Harvard expert

BOSTON: Ben Edelman is one of the world’ best-known experts on internet infrastructure and search engines. The Harvard Business School professor has written extensively on the influence of private forces on the internet architecture and its role in business. Edelman was in India last week on a brief lecture tour, where he addressed the country’s entrepreneurs on the future of online markets. In an exclusive interview on his return, he spoke to Global India Newswire about the regulation of the internet and the future of the internet, among other issues.

The row over the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA) has snowballed majorly in the United States. In India, which you just visited, the judiciary has taken cognizance of the government’s interventionist approach and put web publishers on notice for “offensive content”. Do you see a common cause, of governments policing the internet, which can either be supported or opposed?

It is an illusion to think the internet has any “natural state” free of government intervention. With or without new legislation like SOPA and PIPA, law and regulation inevitably shapes outcomes. The question is: What kind of outcomes do we want? Let’s pick a specific context. Consider a web site that provides substantially solely copyright-infringing content, and that monetizes its offering via ads sold by top ad networks. Should that site be able to collect ad revenues with impunity? Should the ad networks be permitted to profit from these ad placements? The legal system has to answer that question, one way or the other.

Some people may think the answer to both questions is “yes”; others may think the correct answer is “no.” But both are affirmative government choices, and there’s no sense in which either outcome is more natural or more inevitable than the other.

The challenge, of course, is to come up with smart laws and smart regulations that create the appropriate incentives to encourage appropriate conduct. Kindergarteners learn the golden rule, “do unto others as you’d have them do to you.” If an ad network wants to retain the funds it earns lawfully, it shouldn’t be surprised when society insists that the ad network withhold from encourage others to engage in copyright infringement. Instead, I’ve seen lots of top ad networks happily looking the other way — letting infringers make large advertising profits. I don’t see why that should continue.

In India, in addition to the government-sponsored litigation against several websites, including Google and Facebook, there were two back-to-back scandals rocked the search engine giant. What are your views on India taking centrestage in the latest controversy? How do you see it impacting the global perceptions about Google?

Google’s market share in many countries is comfortably over 90 percent, and even in India Google enjoys more than 80 percent market share. As users, publishers, and advertisers become increasingly reliant on Google, they’re bound to worry about the implications of this dependence. And Google’s actions [last week] — copying others’ data and even submitting bogus information to others’ systems — confirm the concern. There are many in India who don’t trust Google, and this week’s events embolden them to insist on better behavior.

The issue of “engineered bias” creeping in to online search results is a concern for online entrepreneurs. Is it a trend, or just perils of unfettered growth?

Five years ago, there was greater competition in search — more viable companies offering search services, in more countries. Five years ago, the leading search site — even then, Google — devoted a much smaller share of its results pages to promoting its own services. Back then, rare was the link to Google’s own services; Google said its objective was to get users to others’ sites as quickly as possible, and sure enough that was what they did.

But now Google is presenting its own results more and more. Search for a hotel, restaurant, local business, or city, and an oversized colored Google Maps result will take much of the top space. Search for any video, and YouTube results tend to dominate, even when other video sites have more relevant material. Google Plus results now permeate search results, including oversized links keeping users at Google properties, and sending that much less traffic to others.

So it’s certainly a trend, and a worrisome trend at that. I see this not as an inevitable peril of growth, but as a result of Google’s ever-growing dominance: If three search engines each had market share of 30 percent, none would dare try the tactics Google has been using.

Is politically-driven regulation the only answer? Or do you predict the internet evolving newer business models to marginalise non-transparent business practices?

I think regulation is one possibility. But make no mistake about it, Google’s tying practices — making users accept other services if they want Google’s dominant search service — are plausibly unlawful under existing law. The first step will be litigation rather than regulation.

Companies growing too big and dominant has invariably drawn the anti-trust debate. The AT&T story provides a backdrop of how breaking up larger companies is a possible solution. Do you advocate such a solution?

Breaking up Google would be a far-reaching remedy. Certainly Google’s incentive to favour its own content would be much reduced if different companies owned search versus the various new businesses like Social; a spun-off Social would be much less likely to receive favoured treatment from Google.

But there are quite a few less intrusive methods that offer similar potential benefits. I wrote up several possibilities in Remedies for Search Bias (http://www.benedelman.org/news/022211-1.html), excerpted from my Indian Journal of Law and Technology publication “Bias in Search Results?: Diagnosis and Response.” For example, I argue that Google shouldn’t be allowed to tell consumers its results are “objective” or “fair” if Google actually gives itself favored treatment — that would be false advertising. And I suggest users should be able to substitute their own preferred search services — for example, presenting Tripadvisor results rather than Google Places reviews, just as users can install their preferred web browsers and email programs into Windows.

SEO and SEM virtually rule the internet. Analytics determine content quality. Is online content getting commoditised?

Certainly it is a tough time to be a content creator. Ad revenue is insufficient to fund expenses. Users jump from one site to another without much apparent loyalty, and online aggregators have worsened this effect. What business model will fund content creation for the coming decades? It’s not at all clear.

News is the last thing that “sells” on the internet. Is there a business case for online news?

I haven’t seen much of a business model for online news. It’s unfortunate — such important work, so crucial to public understanding and to democracy. Yet who will pay the unavoidable costs?

The UK offers one model — robust public funding of the BBC, yielding high-quality news without requiring support from advertisers. But that has its own problems. Many countries would regard this as unacceptable. And it can be challenging to create a genuine diversity of viewpoints when media is funded by governments; all of a sudden governments have to select which views to fund, which is quite worrisome.

Some promising markets like India and the Middle East have seen limited growth in certain areas because non-English websites are still pariahs in more ways than one. What is your prediction in the next five years?

Certainly English-language sites have been dominant in most sectors to date. As the next billion users comes online, there will be ever greater demand for content in other languages. My hope is that market forces will prompt firms to meet these needs.

Do you think India’s exploding mobile ecosystem can be the next internet growth driver?

I hope so. But mobile platforms aren’t perfectly suited to genuine commerce. Just try booking plane tickets on a mobile phone, or even making a serious purchase like a camera or laptop. For these purposes, nothing beats a real computer. Meanwhile, there’s a lurking question of who will control users’ browsing on mobile devices.

On many phones, we’ve seen app makers forced to pay large cuts — often 30 percent — to platform operators. In-app purchases are often subject to similar fees. Those are very high costs, well beyond what merchants pay to credit card fees, online malls, or other intermediaries. In the long run, we need to look for more competition in mobile markets, as excessively powerful intermediaries will impose high prices that slow growth of this important market. (Global India Newswire)

One comment

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