Monday, 14 December 2009

For your paying eyes only

Rupert Murdoch’s speech to the US Federal Trade Commission about the ‘Future of Journalism’, on 3 December, has accelerated an unavoidable development at a time where a the internet is maturing. 

The News Corporation Chairman told US regulators that ‘there is no such thing as a free news story’, and users will have to start paying for online news content - aggregation by websites and search engines should be considered as theft. Undoubtedly, once Murdoch has made the step to put his content behind a wall, many agencies and publishers will follow promptly. 

After all, the making of news is not free. How are all those journalists and reporters paid? It is hardly ‘fair trade’ when dozens of websites and search engines, such as Google and Yahoo!, enjoy the ‘free ride’ they currently have. They do not employ huge editorial teams, while they include News Corporation and other sources in their news pages - team Murdoch called it ‘Kleptomania’ - and they are making vast amounts of money with advertising, while they hardly have any labour costs. Quality journalism costs money and free content cannot keep the news industry going. Free is too expensive.

Strong terms of use

A recent decision of a US federal court in favour of Facebook (Facebook v Power Ventures) highlights the importance for popular websites of using strong terms of use to prevent copying. 

After Power Venture’s website ( and Facebook unsuccessfully tried to reach an agreement to share information, created its own Facebook account, agreed to Facebook’s terms of use and approached other users as an ‘ordinary user’. The fact that Power Ventures copied ‘entire pages’ (proprietary data) was considered to fall within the scope of Facebook’s terms of use, and was therefore deemed illegal. 

The judge, however, did not refer to protecting users’ information when this is not covered by terms of use, and when non-proprietary information is copied. If this is the case, and users have given their consent to the copier, the website in question cannot do much about it. Facebook already allows thousands of other companies limited access to the Facebook platform through its ‘Facebook Connect’ service, as it realises the vast amounts of information it manages attract many businesses. Currently, strong and explicit terms of use seem to be the most powerful tool to prevent information being copied legally.  

Agree to disagree

Poland approved this month a new law effectively banning online gambling in the Eastern European nation. In September 2009, the European Court of Justice (ECJ) ruled that countries can run state monopolies for online sports betting. 

Although ECJ judges recognised certain Member States have laws regarding online gambling that are not compatible with European principles, they ruled this ‘may be justified by overriding reasons relating to the public interest’, such as the high risks of fraud and other criminal activities. A month later, France announced it would give up its monopoly and proposed a law which will, on paper, open up its market to foreign gambling operators. 

At the same time, Denmark is putting forward new rules to regulate its online gambling market, as are Spain and Sweden - while Greece, Germany and Norway keep running their state betting monopolies. The ECJ ruling effectively gave Member States a tool to challenge the European Treaty, which guarantees an open market and freedom of services. The implementation of a European policy and single market for online betting across all 27 Member States seems therefore further away than ever. 

Friday, 4 December 2009

US move closer to end online gambling ban

The debate on online gambling heated up in the US, after a Congress hearing for two bills (HR2266 and HR2267), aimed at legalising online gambling, was scheduled for 3 December. HR2266 aims to delay by one year the entry into force of the Unlawful Internet Gambling Enforcement Act (UIGEA). UIGEA was due to come into effect on 1 December, but its implementation has been delayed until June 2010.

HR2267, known as the Internet Gambling Regulation, Consumer Protection, and Enforcement Act (IGRCP), aims to legalise online poker games in the US. The bill would give the US Treasury Department the authority to establish regulations and license internet gambling operators. Frank Fahrenkopf Jr., President of the American Gaming Association (AGA), said, in a speech at the Global Gaming Expo in Last Vegas, last month, that online gambling could be a good alternative to generate new tax revenues.“Any Congressman or Senator who introduces a piece of legislation that is going to cost something will also have to show how they are going to pay for it”, said Fahrenkopf. “They will be looking around at a place to get additional revenue.”

A study by Pricewaterhouse Coopers demonstrated that taxes on regulated internet gambling could collect up to $63 billion in the next ten years. Senator Ron Wyden (Oregon) proposed an amendment to HR2267 in September, stating that tax revenue generated through the bill should be dedicated to health care reform. Wyden withdrew the proposal a week later, saying “he did not want to increase any controversy already facing the health care package”. Michael Waxman, spokesperson for the Safe and Secure Internet Gambling Initiative, said: “The Senate Finance Committee should approve the resolution, finally putting an end a failed prohibition on internet gambling that leaves Americans unprotected and unlicensed offshore operators as the only beneficiary in a thriving marketplace”. 

The 1961 Wire Act was the basis for the US online gambling ban in the past. However, the US Court of Appeals confirmed in 2002 in ‘Thompson v. Mastercard’ a lower court’s ruling according to which casino games are legal. Although enforcement of the UIGEA has been delayed until June 2010, section eight of the Safe Port Act 2006 makes it illegal for banks and credit card companies to process payments on gambling websites, effectively banning online gambling.