Over the weekend, it came out that two giant pharmacy chains, Rite Aid and CVS, had started blocking Apple Pay, the massively hyped new payment system from Apple that has received much praise for its ease of use. The product had worked for about a week before the two companies started blocking such near field communication (NFC) payments (which also takes out other NFC payment options like Google Wallet). While Rite Aid gave a vague and slightly ridiculous explanation -- that it is "still in the process of evaluating our mobile payment options" -- pretty much everyone knows the truth. A bunch of retailers, led by Walmart, have been creating their own mobile payment system called CurrentC, which cuts out the credit card companies. But, it also builds in all the tracking and spying features of store loyalty cards, expanded across all merchant partners. Apple Pay lets people remain anonymous.
In short: CurrentC lets merchants (1) cut out credit card transaction fees and (2) get more and more data on shoppers. No wonder they want to block out other options.
All of these moves should be concerning. They're clearly not being done with the consumer in mind. Nearly everyone who's played with Apple Pay has agreed that the system is a huge leap ahead for mobile payments in terms of ease of use. Instead, we're seeing giant organizations looking to team up to keep competitors out of the market. At the very least, this should raise serious antitrust issues. But it also demonstrates, in a different sphere, why net neutrality is such a concern. When you have large companies that can effectively collude to block or kill certain powerful and useful apps and services, it hinders and blocks important innovations, leaving consumers significantly worse off. Not only are they left with fewer choices and lower quality apps and services, but it also pushes consumers into services -- like CurrentC -- that take away their privacy.
"See something, say something" continues to be the Dept. of Homeland Security's favorite words. Concerned that its sprawling reach and 100-mile, border-encompassing "Constitution-Free Zone" aren't protective enough, it has routinely called on the American people to report anything suspicious activities their fellow Americans might be participating in… like taking pictures of public structures… or using a hotel's side exits.
Homeland Security Secretary Jeh Johnson said his department will be issuing new guidance to retailers this week giving them pointers on how to spot potential terrorists among their customers by looking at what they're buying.
While saying the government cannot prohibit sales of some everyday materials, Mr. Johnson said retailers should be trained to look for anyone who buys a lot from what he described as a "long list of materials that could be used as explosive precursors."
He said it was an extension of the "If you see something, say something" campaign launched by his predecessor, former Secretary Janet Napolitano, which tries to enlist average Americans to be aware of their immediate environment.
Since it would be impossible to train thousands of retail store employees properly, this will likely take the form of an item watchlist, one that will be constantly subject to change. It will probably also instruct employees to view perfectly normal shopping behavior as suspicious.
As has been the result of previous "see something, say something" efforts, this new directive will create another massive database of false positives for Fusion Center employees and local law enforcement to deal with. Johnson specifically cited pressure cookers (while stating the government couldn't actually forbid their sale) as one example. If so, then this directive has no chance in hell of catching terrorists and is guaranteed to serve up a lot of unsuspecting (and unsuspicious) consumers for further government examination.
Pressure cookers are a legitimate item that thousands of consumers use. Now, they're viewed as the equivalent of buying a U-Haul truck full of fertilizer. Past incidents are prompting future actions, much as they do with the TSA (shoe bomber? off with your shoes!). Constantly being one step behind the clumsiest terrorists isn't going to keep the country any safer. It's just going to make it a worse place to simply "go about your business."
Johnson says the DHS is looking for "explosive precursors," which could be nearly anything. Because retail outlets don't share customer purchase data with each other, this may result in the DHS attempting to justify the requisition of data from multiple retailers using credit/debit card numbers as a starting point. (Just business records, folks. No Fourth Amendment to see here.) And as has been common for forever now, people using cash to purchase stuff will be viewed as extra suspicious.
This is another dangerous, stupid step that won't catch terrorists but will generate tons of budget-justifying busywork for the DHS, and put more people on the government's radar who've done nothing more suspicious than buy things they need or want.
There have been a lot of stories going around about Bitcoin, including some reports that Bitcoin could become a mainstream payment system. For now, Bitcoin seems like a relatively volatile place to store your money, but its protocol may spur innovation beyond online payments. Here are just a few links to check out if you haven't (yet) set up your Bitcoin mining hardware in your living room.
We have a variety of concerns with the so-called "Marketplace Fairness Act," which will require companies selling things online to track, collect and distribute taxes based on where buyers are coming from. For small and medium-sized businesses, this is likely going to be a big burden online (and for buyers in many places, this will likely increase what you have to pay on checkout). Given the fact that the bill is mostly supported by brick and mortar stores and shopping centers, it's not difficult to see how it's an attack on online shopping (for what it's worth, Amazon was initially against the bill, but eventually flipped when it realized that it could use the bill to hold back smaller competitors).
Unfortunately, the Senate passed the bill by a decent margin, 69-27. The bill will move to the House where it may be more difficult to pass. So it may die on the vine, even as the administration has said it will support it.
from the the-shop-canada-and-shop-mexico-bill dept
Last month, we noted that the Senate was coming closer to forcing a sales tax on all internet purchases -- something the big brick-and-mortar retailers have wanted for years to burden online competitors. State governments also love the idea because they're all dying for tax revenue. However, it's unclear why this makes any sense, in particular because it puts a huge burden on anyone selling goods online. And yet, the Senate is pushing forward with S. 743, or what it has euphemistically called the Marketplace Fairness Act. It sounds like Senator Harry Reid is pushing for a vote on it as early as Monday.
Two of his big concerns: that it takes a government function (taxation) and forces it on small businesses and internet retailers, and secondly that this will drive more people to buying from foreign online retailers, mainly in Canada and Mexico. Even the Congressional Research Service has noted that the bill has a massive loophole for foreign retailers selling in the US and that it is "complicated legally."
Others have pointed out that this bill would also have a massive impact on privacy because it requires retailers to turn over the addresses of buyers to state authorities to figure out where to allocate the tax revenue.
Let’s say a seller of naughty toys were audited by the tax authority in another state. To prove that it has remitted all the taxes due in that state, it woud have to turn over, at the least, data reflecting the amount of its sales by geographical location. There are something like 30,000 state and local jurisdictions with authority to impose sales and use taxes, more than 7,500 of which have already adopted this kind of tax. If not ZIP+4, then the actual address of recipients would have to be turned over. Could they turn over non-identifying summaries? The point of an audit is to check the honesty and accuracy of summary filings, so the answer is no.
So state tax authorities would get troves of data about online purchases delivered into their state. The standard misuses apply. It might be transferred to other organs of government, legally or not, for investigation and examination. Curious state bureaucrats might look up the purchasing habits of ex-spouses, famous names, and political figures. The list goes on and on
The more you dig into this bill, the worse it gets. Just the fact that it's suggesting that internet firms should enforce taxation laws that are outside of their own jurisdiction (i.e, "taxation without representation") raises significant due process questions at a time when lots of countries are looking to try to regulate internet companies outside of their own borders. Passing this law will give fodder to other countries to claim jurisdiction over American companies, and provide them with direct evidence that even in the US we don't take jurisdiction and due process seriously.
On top of that, the bill will apply to not just physical goods, but services as well. While those are often not taxed by states, this could also provide more incentive for them to be taxed, which doesn't seem good for anyone.
Honestly, the biggest question in all of this is why it's even necessary in the first place -- other than the fact states who misused existing revenue are now hungry for more. Perhaps they should focus on getting their own houses in order before just demanding more cash from internet companies (and, more directly, their users).
A bunch of anti-tax groups have also put together a petition against the bill. Whether or not you support their general anti-tax position, it does seem ridiculous to put all the burden on anyone selling goods online to have to collect and distribute taxes in states where they have no presence at all. As a site that has its own small store, the idea of having to figure out how to deliver cash to 50 separate states is terrifying.
from the ESRB:-thinking-about-the-children-since-1994 dept
The nationwide discussion revolving around violent video games and what's to be done with them continues without any signs of abating. The usual handwringers (both professional and amateur) continue to express their dismay that games with guns and shooters are being sold to the youth of America, leading us into a future of non-stop mass shootings and Grand Theft Auto-inspired bursts of nihilistic violence.
The concerned cries of "won't someone think of the children" will likely never subside, at least not as long as video games are perceived to be kid-only distractions. (Note to Nintendo: you're really not helping out with this misconception.) The moral panicists paint a bleak picture in which hypothetical 10-year-olds are walking out of Wal-Mart with newly purchased copies of Murder Simulator 5000 and disappearing into their darkened bedrooms, only to emerge moments later armed to the teeth and greatly overestimating their hit points.
It's a terrible future, and one we should all be prepared for. If only it were true.
Thirteen years ago (2000) was the low point: 85% of minors were able to purchase an M-rated game. As of last year, that number was in the low teens.
Only 13 percent of underage shoppers were able to purchase M-rated video games, while a historic low of 24 percent were able to purchase tickets to R-rated movies. In addition, for the first time since the FTC began its mystery shop program in 2000, music CD retailers turned away more than half of the undercover shoppers. Movie DVD retailers also demonstrated steady improvement, permitting less than one-third of child shoppers to purchase R-rated DVDs and unrated DVDs of movies that had been rated R for theaters.
Not only has this number improved dramatically over the last decade, but it's done it voluntarily. The ESRB sets the ratings and retailers enforce it, all without the threat of fines or legal action. So, if these 10-year-olds are shooting each other in the face with fake guns made of pixels, they're doing it without much assistance from retailers.
And, as stated above, retailers aren't just keeping video games from falling into the wrong hands. Other "destructive" influences like violent movies and sweary rock/rap/bluegrass are also being kept away from impressionable teenage minds -- at least by retailers.
So, while the debate will rage on and the fingers will be pointed (but, good lord, not in a gun-like fashion), those who wish to regulate the sale of "violent media" will have to look elsewhere to find a villain willingly supplying the Youth of America with evil playthings. And every year this number remains low is another victory for systems of voluntary compliance and a swift kick in the forebrain for those who believe nothing can be achieved without legislation.
It's always neat to see whatever creative ideas people come up with to make their various crowdfunding projects more interesting. Writer Alex Wilson recently alerted us to his own Kickstarter campaign for printing The Time of Reflection, a short comic he wrote, which recently won "the Eagle Award" at the London Comic-Con, as part of a challenge sponsored by Universal Pictures (as part of a promotional campaign for Snow White and the Huntsman). I'm a bit surprised that Universal didn't require them to then hand over any copyright on the comic (you see that happens sometimes with these kinds of contests), but it looks like Alex and Silvio (who did the drawings) are free to do what they want with the comic. So they're doing this Kickstarter campaign to do printed copies of the comic.
That, alone, probably wouldn't be that interesting, but Wilson added an interesting little twist. There have been plenty of concerns about what's happening to independent comic book shops in the digital era, so Wilson is looking to use Kickstarter as a way to also "give back" to some of those shops. For anyone who pledges over $3, not only do they get a copy of the booklet, but they also get to designate a local, independent comic book shop and Wilson will send a copy to that shop as well (at no cost to the shop), at which point the shop can turn around and sell it, give it away for free, burn it, whatever (and yes, he's checking with each shop before sending it to make sure they'll take it...). Who knows how well that aspect will work, but it's a neat idea to increase awareness and distribution on multiple levels. First, it's really a way for backers to effectively buy an extra copy for the stores in question. Second, by getting the book into cool indie comic book shops, Wilson clearly is hoping to get more awareness of the book as well. The campaign is already well over its initial (modest) goal of raising $450, and it will be interesting to see how well the retail tie-in goes. Hopefully Wilson will stop by again and update us on how various retailers responded to the whole thing, and if anything interesting comes out of it.
It appears that the latest group to whine and complain about totally bogus "losses" from piracy are CD and DVD retailers in the UK, who have commissioned their own study claiming that 30,000 jobs may be lost to piracy. This is from the UK's Entertainment Retailers Association (ERA), though the group doesn't seem to make any indication of its methodology (its own website doesn't even list the study at this point). However, from what's in the article, it certainly sounds like the usual tricks for presenting bogus stats on piracy. It only counts the changes in one direction, ignores the fact that the shift (not loss) in jobs is due to a variety of factors that go well beyond "piracy," and ignores all of the new jobs created due to the shift to digital distribution of content. But, of course, that doesn't make for nearly as interesting a story... especially when the ERA is teaming up with a bunch of famous actors to whine about how they are too incompetent to learn how to adapt to the changing market. If these folks ran the buggy whip industry a century ago, we'd all still be driving around in horse drawn carriages. Markets change, and it creates new opportunities. Stop whining about the the way things used to be, and focus on taking advantage of all of those new opportunities.
Remember how Activision had preemptively sued Gibson for a declaratory judgment that it didn't infringe on a really questionable patent concerning a computerized guitar for a "virtual" concert? Well, Gibson has now struck back, and it's not just suing Activision, but almost all the retailers who sell it as well, including Wal-Mart, Target, Kmart, Amazon.com, Toys 'R' Us and GameStop. The idea, clearly, is to have those retailers put pressure on Activision. Update: Wired reports that the lawsuit also covers a bunch of other companies. Basically, Gibson is suing anyone even remotely connected to video games that involve fake guitars.
Of course, there are all sorts of questionable things about this lawsuit. As we pointed out when Activision first sued, Gibson's patent doesn't seem similar to "Guitar Hero" at all. It talks about playing a real concert, with a real guitar (with strings) attached to a head mounted display. Also, as Activision points out, Gibson didn't care about the patent as long as Activision and Gibson had a marketing agreement. They only started calling for patent infringement after the marketing agreement ended. Finally, suing retailers for selling the game is quite sketchy. In fact, the Supreme Court just heard a case looking at whether or not that was legit, and the Justices sounded quite skeptical. Gibson is clearly posturing to try to push for a settlement -- and in the process, showing yet another way to abuse the patent system.
We've talked in the past about how both DirecTV and the RIAA have used a borderline legal version of a shakedown to get people to pay them money, without them having a chance to defend themselves. The way the process works is simple. They come up with a mere slip of evidence that the person might be guilty, and then send them threatening letters offering not to sue if they merely pay up first. With DirecTV, the company used names of people who had bought smart card writing devices, even though such devices have perfectly legitimate uses beyond pirating satellite TV signals. With the RIAA, obviously, it was through a list of (often questionable) IP addresses. By using this method, many people pay rather than face a lawsuit -- even if they're innocent. They recognize that the cost of a lawsuit is much worse than just paying the settlement charge. In the organized crime world, this is generally known as a shakedown, or if you prefer, extortion. Yet, for some reason, it's legal when these businesses do it.
And, it turns out, the RIAA and DirecTV are not alone in doing so. Perhaps they even learned the practice by watching how big retailers approach shoplifters. Reader Josh sent in a Wall Street Journal article showing how many large retail chain stores are using a very similar process against suspected shoplifters. In the most egregious case, Home Depot detained a guy it thought was stealing drill bits, but dropped the effort after he showed them a receipt. A few weeks later, though, he received a letter demanding $3,000, which was later raised to $6,000. Admittedly, the amount is quite high there as the law firm that handled the case later admitted to a typo in entering the amount -- but the process seems quite similar to the RIAA/DirecTV process. It doesn't matter if the person is guilty or innocent. You just ask them to pay up or threaten them with a lawsuit. The retailers all insist this is a necessary process since shoplifting costs them so much -- but it's hard to see how forcing people to pay up without a chance to defend themselves is ever right, no matter how much shoplifting costs these retailers.