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I was pleased to be interviewed last night on BBC America World News (live!) about the convictions of three senior Google executives by an Italian court for privacy violations.  The case involved a video uploaded to Google Videos (before the acquisition of YouTube) that showed the bullying of a person with disabilities. (See "Larger Threat is Seen in Google Case" by the New York Times' Rachel Donadio for the details.)

Internet commentators were up-in-arms about the conviction, which can't possibly be reconciled with European law or common sense.  The convictions won't survive appeals, and the government knows that as well as anyone.  They neither want to or intend to win this case.  If they did, it would mean the end of the Internet in Italy, if nothing else. Still, the case is worth worrying about, for reasons I'll make clear in a moment.

But let's consider the merits of the prosecution. Prosecutors bring criminal actions because they want to change behavior—behavior of the defendant and, more important given the limited resources of the government, others like him.  What behavior did the government want to change here?

The video was posted by a third party. Within a few months, the Italian government reported to Google their belief that it violated the privacy rights of the bullying victim, and Google took it down. They cooperated in helping the government identify who had posted it, which in turn led to the bullies themselves.

The only thing the company did not do was to screen the video before posting it. The Google executives convicted in absentia had no personal involvement in the video. They are being sued for what they did not do, and did not do personally.

So if the prosecution stands, it leads to a new rule for third-party content: to avoid criminal liability, company executives must personally ensure that no hosted content violates the rights of any third party.

In the future, the only thing employees of Internet hosting services of all kinds could do to avoid criminal prosecution would be to pre-screen all user content before putting it on their website.  And pre-screen them for what?  Any possible violation of any possible rights.  So not only would they have to review the contents with an eye toward the laws of every possible jurisdiction, but they would also need to obtain releases from everyone involved, and to ensure those releases were legally binding. For starters.

It's unlikely that such filtering could be done in an automated fashion. It is true that YouTube, for example, filters user postings for copyright violations, but that is only because the copyright holders give them reference files that can be compared. The only instruction this conviction communicates to service providers is "don't violate any rights." You can't filter for that!

The prosecutor’s position in this case is that criminal liability is strict—that is, that it attaches even to third parties who do nothing beyond hosting the content.

If that were the rule, there would of course be no Internet as we know it. No company could possibly afford to take that level of precaution, particularly not for a service that is largely or entirely free to users. The alternative is to risk prison for any and all employees of the company.

(The Google execs got sentences of six months in prison each, but they won't serve them no matter how the case comes out. In Italy, sentences of less than three years are automatically suspended.)

And of course that isn’t the rule.  Both the U.S. and the E.U. wisely grant immunity to services that simply host user content, whether it’s videos, photos, blogs, websites, ads, reviews, or comments. That immunity has been settled law in the U.S. since 1996 and the E.U. since 2000. Without that immunity, we simply wouldn't have--for better or worse--YouTube, Flickr, MySpace, Twitter, Facebook, Craigslist, eBay, blogs, user reviews, comments on articles or other postings, feedback, etc.

(The immunity law, as I write in Law Five of "The Laws of Disruption," is one of the best examples of the kind of regulating that encourages rather than interferes with emerging technologies and the new forms of interaction they enable.)

Once a hosting service becomes aware of a possible infringement of rights, to preserve immunity most jurisdictions require a reasonable investigation and (assuming there is merit to the complaint), removal of the offending content. That, for example, is the "notice and takedown" regime in the U.S. for content that violates copyright.

The government in this case knows the rule as well as anyone.  This prosecution is entirely cynical—the government neither wants to nor intends to win on appeal.  It was brought to give the appearance of doing something in response to the disturbing contents of the video (the actual perpetrators and the actual poster have already been dealt with). Google in this sense is an easy target, and a safe one in that the company will vigorously fight the convictions until the madness ends.

And not unrelated, it underscores a message the Italian government has been sending any way it can to those forms of media it doesn’t already control—that it will use whatever means at its disposal, including the courts, to intimidate sources it can’t yet regulate.

So in the end it isn’t a case about liability on the Internet so much as a case about the power of new media to challenge governments that aren’t especially interested in free speech.

Internet pundits are right to be outraged and disturbed by the audacious behavior of the government. But they should be more concerned about what this case says about freedom of the press in Italy and less what it says about the future of liability for content hosts.

And what it says about the Internet as a powerful, emerging form of communication that can't easily be intimidated.

Larry is speaking this week as part of TTI Vanguard's "Shifts Happen" conference in San Francisco. Check out the remarkable list of participants and speakers.


I don’t usually blog “personal” stories, but this one is irresistible.  It raises disturbing questions at the border of digital and physical life, and legal problems of trademark and the emerging issues of cloud computing and data liability.

EBay, as everyone knows, has been struggling to improve its customer experience in the light of disappointing results in the last few years. One problem in particular that the company has worked hard to address is the problem of sellers who either misrepresent their items or otherwise underperform in the transaction, tarnishing the image of eBay in the process.

There are of course legal consequences to some of these problems as well. EBay has been the subject of numerous lawsuits in the U.S. and abroad from trademark holders claiming that eBay sellers are offering knock-off or forged goods as branded merchandise, or selling items outside the often-strict terms under which authorized merchants may sell branded goods. (For example, selling outside assigned geographic territory, or selling below the authorized price or terms.)

I’ve written extensively about the eBay litigation, including lawsuits brought by Tiffany in the U.S. and the Louis Vuitton brands in France. The question in these cases comes down to a definition of what eBay actually “is”—a department store responsible for the merchandise sold on its premises (liable) or a community bulletin board offered as a convenience to connect buyers and sellers of a variety of unrelated products and services (not liable).

EBay is neither of these things—it is an example of a new kind of virtual marketplace enabled by digital technology. But the law here, as elsewhere, has not kept up with the changing realities of digital life, leaving judges to struggle with analogies that just don’t fit. EBay has scored strong victories in the U.S., and significant losses abroad. Whatever the results in these cases, the legal reasoning is always hopeless and the opinions useless as precedent. The law evolves slowly.

(In a new twist, just the other week eBay was ordered to pay over $300,000 by a French court in another dispute with Louis Vuitton. This one involved eBay’s practice of purchasing advertising keywords that were common misspellings of LVMH marks that directed searches to eBay. EBay is appealing.)

Amazon’s third-party Marketplace, which has eaten into eBay’s market significantly over the years, has largely avoided these public legal skirmishes. Brand holders and their distributors may prefer to sell through Amazon than eBay, giving an incentive not to litigate when problems do arise. Amazon also manages a much smaller and generally more professional group of third party merchants than does eBay and, it appears, exercises more vigorous policing over the items that appear under the Amazon banner but which in fact are sold and distributed by third parties.

Well, maybe not. Recently I purchased a replacement camera battery from an Amazon third party merchant. (You can find the listing here, though I strongly suspect it will be changed or disabled very shortly for reasons that will become clear in a moment.)

Dissatisfied with after-market batteries I have purchased in the past, I decided this time to buy an actual Minolta battery for my Minolta camera. The listing I purchased from described the item as a “Konica Minolta DiMAGE X Replacement Battery,” and even had a link immediately below to “Other products by Konica-Minolta” (sic), which went to a page of authorized, branded goods from the electronics giant. Overall, the listing gives several indications that suggest an actual, new Minolta battery is being offered.

I received the battery today, only to find that what I received was an OEM battery of completely unknown quality and a completely different brand. (I haven’t bothered to test it out yet—but in any case, my problem with OEM batteries is that they often stop holding a charge after a month or two of use.) The purchase price was small, and the unrefundable shipping and handling represented about a third of the cost. Still, I wrote to the merchant to request a return authorization.

The merchant called immediately with an unusual story to tell. He claimed that his original listing was entirely accurate, and that the title listed his house brand name (“Wasabi”) and not Konica Minolta. But, he advised, Amazon allows other merchants who sell “the same item” to include themselves as a seller of the item and to make modifications to the page.  Another seller, he claimed, changed the listing to misrepresent the item.

Even if another seller makes changes that are inaccurate or, in this case, obviously fraudulent and infringing of strong trademarks, the seller complained to me that there is nothing the original seller can do. He claims that when he has previously advised Amazon of similar changes, Amazon often failed to correct the listings and informed him there was nothing he could do about it—that later changes take priority.

There is indeed a second seller listed as offering this item, though the merchant I purchased from is still the default seller on the page and, in fact, the second seller offers “the same item” at a higher price. (It’s unclear what the second seller actually sells--a Konica Minolta battery or a different after-market compatible battery. Amazon has several other pages offering several other after-market batteries.) There were no reviews of the item until I wrote one today noting the misrepresentation.

The merchant indicated that he hadn’t noticed this particular error (he sells a great deal of after-market items) but that when he received my complaint he immediately requested Amazon correct the page. Amazon, he said, rejected the changes. (As of the end of the day, the original page is still intact.) He offered to—and later did—fully refund my purchase including the shipping and handling, and told me to keep the item anyway. I told him I would contact Amazon, which he encouraged me to do, and asked me to call him back if they didn’t confirm everything he had told me.

Amazon denied everything he told me. Specifically, the customer service representative told me that he would file a complaint against the merchant but that, “I can tell you that what he told you is completely inaccurate.” (I don’t think the call was being recorded—in any case, I wasn’t notified if it was.)

Worse, when I asked them to get the merchant on the call, the customer service representative agreed but told me that “for legal purposes” he would not be able to confirm or deny anything he had previously said to me once the merchant got on the call. (That strikes me as the kind of “urban myth” legal advice that has no actual value but which gets passed along all the time.) True to his promise, the Amazon CSR listened politely as the merchant repeated his explanation of a serious breakdown in Amazon’s process, told in the presence of a customer, and neither confirmed nor denied it, much to the merchant’s frustration.

After the call, the merchant emailed me the following quotation from, he says, the Seller Support page’s “Detail Page Control” process:

In most categories, multiple sellers sell the same product through a single detail page. This provides an organized, uniform product presence in our catalog and increases the convenience of comparison shopping for potential buyers.

The information displayed on an Amazon single detail page, called "reconciled" data, is drawn from multiple seller contributions. When a seller contributes product information to an existing item in our catalog, a decision is made about whether or not to display any changes to the product details on the single detail page. This decision is processed automatically according to business logic known as "Detail Page Control." Detail Page Control determines which of the available product descriptions, features, titles, and additional details are displayed on the single detail page.

The selection is made based on which contributing seller has greater Detail Page Control as determined by our automated system. This could be Amazon or any seller offering the item. Detail Page Control rankings are not modified manually, but are regularly reviewed and updated automatically by our system. Some factors that affect Detail Page Control are a seller's sales volume, refund rate, buyer feedback, and A-to-z Guarantee claims.

I can’t say if this is actually what the Amazon page says (it is behind a firewall for sellers) or what, in addition, the page says regarding fraudulent information and information that constitutes potential trademark infringement or other actionable unfair trade practices. Nor is it clear what controls exist over merchants claiming to sell “the same product” but who in fact sell something different. Nor can I say why, when asked directly by the merchant on the call to assure the customer (me) that the merchant was accurately describing Amazon’s process, the CSR refused to “confirm or deny anything.”

The description of the system, if accurate, suggests a significant level of control exercised by Amazon over the accuracy and quality of the content of its listings. It goes beyond what I understand to be the level of control exercised by eBay.

Could this prove definitive in trademark disputes brought by companies such as, oh I don’t know, Konica Minolta? Perhaps so. Could it serve as evidence eBay could use to make the case that it is “less” of a storefront than Amazon in eBay’s own litigation? Well, I’d certainly offer it were I representing eBay. (I do not represent eBay. Or Amazon. Or Konica Minolta. Or the merchant in this case.)

The merchant, understandably upset if he is telling the truth, wrote that he owns a small business that provides for his wife and son and is greatly distressed that I have had a bad experience with him for which he cannot get Amazon to take the blame. Though I am a long-time and very satisfied Amazon customer, I have had enough bad experiences with their third party Amazon marketplace resellers to suspect he is telling the truth here.

That is, it seems plausible to me that another seller sabotaged his listing and that Amazon’s processes aren’t good enough to correct that behavior on a timely basis. A few well-placed lawsuits by brand holders ought to take care of the problem, if in fact there is a problem. But even an honest merchant is a small cog in a big machine, with little recourse except perhaps to move his business to another marketplace. (But then he would have to learn another perhaps imperfect system and would lose all the reputation value of his nearly 4,000 customer reviews.)

One disturbing detail, however. After the calls I went back and looked at the sales receipt that accompanied the battery, which was shipped by the merchant and not Amazon. The receipt, printed under the merchant’s letterhead, includes an SKU that I assume to be the merchant’s and not Amazon’s. In any case, the item description repeats the description on the Amazon page, that is, it describes the item as a Konica Minolta battery and not the merchant’s house branded OEM.

I asked the merchant by way of follow-up to explain his Sales Receipt. He writes, “We use the title of the product (as listed on Amazon) on our printed sales receipt. If the product title changes on Amazon, so too will the description as it appears on our sales receipt.”

I suspect what he means is that either he uses Amazon’s systems or that his system pulls its data on-demand from Amazon. If so, here’s another interesting legal problem raised by the move to cloud computing. Who’s responsible when bad data generates actionable misrepresentations?


I write today on CNET (see "Gripes over Google Books go Technical") about the Department of Justice's filing last week in the Google Books case.  The Amended Settlement Agreement (ASA), released in November, will be discussed by the parties at a fairness hearing on Feb. 18th.

The DoJ continues to object to the settlement, but now their objections to the most recent version are considerably muted from earlier filings.  Principally, they now argue that the mechanisms of the class-action lawsuit is inappropriate for resolving long-standing problems in the law of copyright, most importantly the growing category of works whose rights holders are unknown and unknowable--the so-called "orphan works."

It's true that the litigation started out challenging Google's scanning and making available for search purposes the text of out-of-print books.  The authors and publishers argued that action was wholesale copyright infringement.  Google countered that it was a fair use, a statutory exception to the rule that requires the permission of the rights holder to copy all or part of a work.  Rather than litigate that point, the parties decided to create a new business model for making out-of-print texts available in digital form.  (Owners of rights to in-print texts have dealt separately with Google.)

The DoJ understands the need for a solution to the orphan works problem created by repeated and retroactive extensions of copyright terms, a problem created by Congress over the last several decades.  They just don't think that the ASA, or more to the point class action litigation, is an appropriate legal vehicle to solve it.

I note in the piece that class actions serve a wide variety of important uses, and that it is not unusual for such lawsuits to stray far from their initial claims into something approaching the restructuring of broken industries.  Whether this is such an occasion will be a matter first for the district court judge, Danny Chin, to decide.  No doubt the case will eventually be appealed to the Second Circuit Court of Appeals, which may take a different view.  The ASA may sink or swim on grounds other than its status as a class action.

That the government is largely falling back to technical objections, however, seems significant.  We'll see how significant in the coming months.

My talk at Microsoft Research in October is now available for viewing on the Microsoft Research website.

This was one of the first talks I gave introducing "The Laws of Disruption." It was followed by a spirited Q&A on a variety of current events in technology law and policy.

"First Friday Book Synopsis", Robert Morris, Jan. 28, 2010. An excerpt from Larry's interview with Robert Morris, business book review extraordinaire.