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The Unintended Consequences Of Internet Regulation

Posted on by Mike Masnick

Over the last decade or so, there’s been a growing chorus of people insisting (misleadingly) that the internet is a “wild west” that needs regulation. The reasons stated for this apparently necessary regulation change over time, but the underlying discussion tends to be the same: bad stuff is happening online and it needs to stop. Sometimes, the discussion is more focused on how internet companies are somehow “experimenting” with our lives and our data.

We’ve seen plenty of new internet regulations pop up and — oddly to me, at least — no one seems to comment on how these regulations themselves seem to be experimenting on the way innovation works and our ability to communicate with others around the world.

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Over the last few years, there has been an increasing drumbeat for greater internet regulation. But even the most well-intended policy approaches may have completely unexpected negative consequences that may outweigh the benefits sought by the regulation in the first place. Those benefits can be difficult to achieve and difficult to measure, while this paper finds that such regulations frequently have a negative impact on investment in covered internet companies, with declines ranging from 15% to 73%.

Read the full report below, or download the info sheet.

Published by The Copia Institute & CCIA Research Center. Written by Mike Masnick.

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As debates have increased over the appropriate levels of liability that should be placed on internet platforms, there has been precious little research looking into the actual impact of strong intermediary and platform protections from liability on innovation and investment. This paper takes an initial look at different legal regimes across different times and regions to attempt to separate out the impact. By using cross-regional comparisons, as well as changes over time within certain countries, we explore the actual impact of different levels of platform protection and how it impacts investment in innovation.