Author: Paul Wallbank

  • Are bloggers immune from the law?

    Are bloggers immune from the law?

    Last week Lord Justice Leveson of the British inquiry into the culture, practice and ethics of the press gave his first public speech since handing down his report to the UK Parliament.

    In this speech, Lord Leveson claimed that bloggers and social media users have an advantage over traditional media channels because they don’t respect the law. This is nonsense and detracts from the importance of the UK inquiry.

    Speaking to the Communications Law Centre in Sydney last Friday, Lord Leveson gave his perspectives on how privacy is evolving as the media struggles with a 24 hour news cycle and the rise of the Internet.

    One particular point he made was how the differing economics of traditional media and internet channels affected moral judgements.

    “online bloggers or tweeters are not subject to the financial incentives which affect the print media, and which would persuade the press not to overstep society’s values and ethical standards.”

    This view seems flawed – the reason for the UK inquiry into the ethics of the press was because the reporters at some of the nation’s top selling newspapers were overstepping society’s standards. They were doing this in the pursuit of profit.

    At the other end of the scale, Leveson’s implication is that because most bloggers and social media users aren’t making money from their operations this makes them more prone to flaunting the community’s laws and morals.

    What that view overlooks is that those bloggers, Facebook posters and Twitterers don’t live in magical castles sipping the fragrant, rainbow coloured milk of bejewelled unicorns – they have day jobs that pay for their online activities which often makes them far more aware of societal norms than those locked in the hyper-competitive and insular world of professional journalism.

    Later in his speech Leveson expanded on this theme with a comment about the jurisdiction of bloggers and their servers.

    The established media broadly conforms to the law and when they do not they are potentially liable under the law. In so  far as the internet is concerned there has been and, for many, there remains a perception that actions do not have legal consequences. Bloggers rejoice in placing their servers outside the jurisdiction where different laws apply. the writ of the law is said not to run. It is believed therefore that the shadow of the law is unable to play the same role it has played with the established media.

    This view is clearly at odds with reality as again it was the widespread failure of the ‘established media’ in conforming to UK law made Leveson’s inquiry necessary.

    Bloggers and other internet users being somehow immune to legal consequences is a clearly not the case.

    A good example of this are the various British computer hackers and webmasters who’ve found themselves facing extradition to the US for actions which are either not illegal in the UK or would face minor penalties.

    Probably the best example of Internet users facing the full force of the law is the persecution of Paul Chambers who was prosecuted and convicted for making threats against an airport in an innocuous tweet that the local police and airport management thought was irrelevant.

    The force of the law that was thrown against Mr Chambers was impressive compared to the somewhat reluctant efforts of bringing charges against the dozens of journalists, editors and crooked policemen exposed by the Leveson inquiry.

    At the heart of the difference between the traditional media and the online communities is a power and economic imbalance. Despite the declining fortunes of newspapers, they are still politically powerful, influential and well resourced. Which is a good reason why prosecutors, police and politicians are reluctant to hold them account for their excesses.

    On the other hand the vast bulk of bloggers are not; they don’t have a masthead to hide behind or a large, well funded legal team to defend them which actually makes them an easier target for litigation and criminal charges.

    Some bloggers may believe they are immune from the law, but the reason for that is because they are ignorant of the legal system’s reach. Some of them will pay for that ignorance.

    The idea though that bloggers and social media users have some legal advantage over traditional media outlets because of their comparative poverty and location of their servers is simply wrong.

    If anything the advantage is firmly in favour of those working for big business. This is the real lesson of the UK media scandals of the past two years.

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  • Being damned for publishing

    Being damned for publishing

    The tragic death of one of the nurses who took a hoax call from a pair of Australian radio hosts posing as the queen and Prince Charles should be a reminder of the real consequences of publishing.

    Volume Two of the Leveson Report into the ethics and practices of the UK media describes some of the personal consequences of the terrible behaviour of the UK newspaper industry, the effects are devastating and real.

    At a time when we are all publishers – from newspapers and radio stations through to Facebook posts and blogs like this – we all have to keep in mind the consequences of what happens when we press “post”.

    Hopefully the dills at 2Day-FM are reflecting on the consequences of their actions, the rest of us should learn from them before we like a dumb, racist Facebook update, post an abuse tweet or plaster someone’s personal details across the web.

    There’s also a management lesson here – the nursing staff at King Edward VII hospital should never have been put in the position of receiving media calls, particularly ones purporting to come from the royal household. One hopes, but isn’t optimistic, that the hospital’s managers are also reflecting on their role in this tragedy.

    Every action we take has real world consequences, it’s something that we forget when we’re sitting comfortably at our desks or typing on our smartphones.

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  • Transferring risk to the customer

    Transferring risk to the customer

    AirBnB is one of the poster children for the “collaborative consumption” model of internet businesses where people can put their spare resources, in this case rooms, out into the marketplace.

    Like most web based businesses though the customer service is poor and the proprietors try to push responsibility for the platform’s use back onto the site’s users.

    A good example of this is an article this week in the New York Times where AirBnB hosts risk fines and eviction for breaching their leases or local accommodation laws.

    When Nigel Warren rented out his New York apartment while he was out of town, he returned to find he was facing eviction and up to $40,000 in fines. Fortunately he avoided both but AirBnB did little to help him except to point him in the direction of the terms and conditions which required him to obey all local laws.

    The New York Times asked AirBnB for comment and received corporate platitudes about how their service helps struggling home owners but no real response to the risks of falling foul to local government, landlords, building owners or insurance problems by sub-letting their residences.

    Failing the customer service test is not just AirBnB’s problem, Vlad Gurovich was scammed by a buyer on eBay and now he finds PayPal is chasing him for outstanding money.

    This is a pretty typical problem for PayPal and eBay customers – as Vlad has found, the various seller protections often prove to be useless when dispute resolution favours scammersand PayPal’s philosophy of shutting down accounts unilaterally and without appeal exposes sellers to substantial risks.

    Interestingly, PayPal’s president David Marcus claimed earlier this year that he was trying to change this culture within the company. It seems that’s not going well.

    PayPal, eBay and AirBnB are alone in this of Soviet customer support model – Amazon, Google and most web2.0 businesses have this culture.

    In many ways it’s understandable as dealing with customers is hard. In the view of the modern business world, cutting deals is glamorous while looking after customers is a grubby, low level task that should be outsourced whenever possible.

    Pushing the risks onto users also makes sense from a business perspective, that makes the billion dollar valuations of these services look even better.

    For the founders of these services, none of this is a problem. By the time the true costs and risks are understood, the founders have made their exit and the greater fools who bought the businesses have to deal with the mess.

    While the greater fools can afford to carry the costs, the real concern is for users who may found themselves out of money and out of a place to live.

    That’s why the founders of these businesses need to be called to account for their ethical lapses.

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  • Stumbing into recession

    Stumbing into recession

    The Committee for Economic Development Australia (CEDA) today released its 2012 Big Issues survey looking at the responses of 7000 business people on the issues confronting Australian industry in 2012.

    One of the notable results is that business people don’t care about government surpluses. A third are neutral on the question “do you believe maintaining a government surplus is important” while 35% disagree that it is a high priority.

    Q10

    Yet despite the electorate and business saying the deficit is not a priority, the politicians still obsess about maintaining their surplus.

    Now Australia’s mining boom has come to an end – along with the blue sky economic assumptions that underlie both sides of politics’ spending plans – governments are desperately trying to fudge the books and continue the pretense that their budgets are in the black.

    Driving this obsession with avoiding deficits is the religious belief among Australia’s political classes that Triple – A credit ratings from the discredited Wall Street ratings agencies is more important than educating the nation’s children, caring for the country’s sick or building the infrastructure to compete in the 21st Century.

    The real danger with this deficit obsession is that there is a very high possibility that state and Federal governments are going to tip Australia into a recession driven by European style austerity. Already we see this developing as various states start slipping backwards according to the ABS’ latest accounts.

    graph courtesy of Macrobusiness

    Another interesting result from the CEDA report is how business’ view the Australia in the Asian Century report with nearly 80% of respondents saying the issue is important or critical.

    It is questionable whether Australian business is prepared to face the realities of an Asian Century as David Llewellyn-Smith writes at the Macro Business Blog, Australia’s businesses are looking more at getting help from the government to cut domestic costs rather than sell into Asia. That inward focus of Australian business since the mid-1990s is the topic for another blog post.

    The sad thing is that the government aspects of Asian Century report is stillborn as surplus obsessed politicians carve into skills training and innovation programs in a vain attempt to balance the books while failing to reform the tax system or address the middle class welfare that’s squandered most of the returns from the last decade of prosperity.

    Australia’s politicians are very soon going to have to decide who they govern on behalf of, the corrupt and incomptent ratings agencies or the people who vote for them and pay the taxes which support them and their political parties. For some, this might be a tough choice.

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  • How the film industry cons governments

    How the film industry cons governments

    “I would never make a movie where I didn’t get an incentive and I don’t ever intend to” states Michael Benaroya, producer of the movie Margin Call, in a New York Times story on movie studio subsidies.

    While we focus on the cost of subsidies to motor manufacturing, one sector that beats all others for playing governments for suckers is the global film industry.

    “Incentives” are a huge factor in determining where studios will film their latest blockbuster, Australia’s learning this the hard way as rent seekers looking for fat subsidies parade Hollywood stars in an effort to convince publicity hungry ministers that giving fat payments to the major production houses is good for jobs.

    The problem with this is that these susbidies aren’t that great for employment – Accompanying the New York Times’ video is a story on how Michigan’s dream of building a film industry has foundered.

    “Film is one of the few industries that’s really well subsidised and that’s a really attractive thing” Michael Benaroya says in the video.

    Before Michael even made the movie, he sold the rights to the New York production subsidies to investors. Who says financial engineering is the purview of Wall Street?

    The question for governments, taxpayers and those who want to build a sustainable movie industry in their city, state or country is do you want to attract “entrepreneurs” like Michael Benaroya who are shopping around the world for the best deal.

    New York might be the flavour today, but tomorrow it might be Sydney, Toronto or Prague. If the incentives aren’t fat enough then the movie productions may not come back for decades.

    In the meantime the crews, production assistants and catering companies who make up most of the employment on a major production move onto other jobs so the skills and industry infrastructure is lost.

    The biggest challenge is for governments, it’s estimated that New York state gives away over $400 million in subsidies and it’s difficult to see how that sort of expenditure can be justified as politicians face cuts to basic spending in today’s austere times.

    For the taxpayers, we need to be demanding fair value and real long term plans behind the subsidies doled out to the film, motor manufacturing and other industries.

    During the good times it was easy for opportunist politicians to dole out money to rent seekers for a media opportunity or to boost votes in a key electorate, but today that spending has to be strategic with real value and outcomes.

    As Michael Benroya shows, when an entire industry is based around government subsidies and incentives the leaders are those who know how to manage the bureaucracy and fill in the forms properly. Is that what we want our industries to become?

    If the answer is ‘yes’, then the next question is ‘can we afford it?’

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