DeCSS, crypto, law, and economics

[Pete Chown]

John S. Denker wrote:

> Note that in the absence of market segmentation,
> the society as a whole is worse off.

I see what you mean, but do you think it applies to DVDs?  The 
segmentation needs to be in each market, between rich and poor 
consumers.  What we actually have is segmentation between markets, say 
Europe and the US.  Europe and the US have similar income per head, but 
various obscure factors cause products like DVDs to be more expensive in 
Europe.

The other interesting thing about market segmentation is that it is 
often illegal.  Britain's competition law is being reformed in summer 
this year.  Running a cartel will become a crime, in addition to the 
current civil penalty regime.  It will also become possible to bring 
private anti-trust suits.  In other words we are moving towards the 
American model of anti-trust.

I intend to make a complaint about DVD region coding, and I will wait 
until the summer because the prospect of going to prison will add some 
extra pizazz for the defending team.  Don't get too excited, though, it 
isn't always easy to get these things moving in the UK.  Read about the 
Walls Ice Cream case if you're curious...

One thing I will need, though, is an economic argument, so keep it coming...

> It would be the height of foolishness and the height
> of hypocrisy to pretend that whatever favors my selfish
> interests is "moral" while whatever favors somebody else's
> selfish interests is "immoral".  Much of the debate about
> intellectual property issues, on both sides, stinks of
> foolish hypocrisy.

I agree up to a point, but I also think properly functioning markets are 
very beneficial to a society.  I think the moral position is normally 
the one that creates the most competition.  For example, consumers 
should have the right to choose between a region-2 DVD player and a 
region free one.  People should have the right to choose between 
watching DVDs on a dedicated player, on a PC running Windows and a PC 
running Linux.

> There are two not-quite-separate sensible questions:
>  -- Find a way to maximize the created wealth.
>  -- Decide how to divvy up the created wealth among
> the various stakeholders:  inventors, authors, performers,
> publishers, manufacturers, wholesalers, retailers,
> consumers, et cetera.

Would you rather maximise wealth or maximise competition?  It sounds 
like a silly question, but suppose the technology and legal framework 
required to support your solution prevented the use of open source.  In 
that case, I would rather maximise competition.  In any case, it might 
be that this would maximise wealth in the long term, by increasing 
technological innovation.

-- 
Pete


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