Category: Digital Culture

Digital Citizens Alliance Issues Its First Report on Digital Secondary Markets

secondary markets

Today, both producers and consumers are increasingly aware that every opportunity and convenience afforded by digital commerce comes with an unwritten warning label that scams abound—from counterfeiting to price gouging to malware attacks. Thus, in 2024, Digital Citizens Alliance independently launched the Responsible Markets Initiative (RMI) to research existing and emerging harms in secondary markets. Its first report on digital secondary markets states …

Digital Citizens launched the Responsible Markets Initiative (RMI) – to put a spotlight on these markets to help consumers make smart decisions and provide information to policymakers grappling with how to ensure online trust and safety.

Among the many unfounded claims by tech-utopians is that the internet will bring about an age of abundance for producers and consumers alike. This belief, bordering on religious faith, is now being promoted as an inevitable benefit of artificial intelligence—and this despite the mountain of evidence that without regulation, cyberspace is a huckster’s playground. In RMI’s report titled When It Comes to Digital Markets, Trust Can’t Be Secondary, it highlights three secondary markets—event tickets, real estate, and domain names—where digital technology enables large-scale predatory practices that harm consumers with excessive prices and artificial scarcity.

Concerts and Sporting Events Are Now Luxury Experiences

Price gouging in the secondary ticket market is not news to anyone who has purchased event tickets in recent years, but the RMI report is an eye-opener just the same. It states…

Brokers use sophisticated techniques and relationships with promoters to snap up coveted tickets before fans can buy them. That in turn forces the fans who were beaten to the punch by brokers to shell out hundreds, if not thousands, of dollars in ticket costs and service fees to StubHub, Vivid Seats, SeatGeek, and other secondary platforms.

Historically, a scalper on the street commits a crime by selling tickets at a premium. But not only was the old-school scalper not marking up prices by thousands—or even tens of thousands—of dollars, he also did not have a means to pre-buy blocks of tickets before consumers had the opportunity to buy them at their original prices. That’s exactly what digital technology enables the ticket brokers to do, creating artificial scarcity by manufacturing a “secondary market” the moment the primary market opens to the public.

From there, according to the RMI report, the brokers’ blocks of tickets are sold via online platforms like StubHub who add more extraordinary fees to the prices that were already inflated by the brokers. Thus, a ticket for a premium event, say originally priced around $400, becomes a $1400 ticket as listed on the platform, only to finalize as a $1,900 ticket at the actual point of purchase. And all while creating an atmosphere that the consumer must act fast to obtain tickets or miss the event.

Even non-concertgoers are likely familiar with stories about Taylor Swift’s last tour for which American fans paid outrageous, secondary-market prices. “Some found it more cost-effective to fly to Europe to catch a Taylor Swift show due to European regulations that combat charging exorbitant prices for tickets…” the RMI report states. It also forecasts similar shenanigans for Lady Gaga’s upcoming “Mayhem Ball Tour,” stating,  “For example, second row seats in Section 212 are selling for $5,175.40 (with fees) on VividSeats.”

Let Me Interject …

As a copyright advocate, I cannot ignore the layers of hypocrisy the ticket sale fiasco reveals about tech-utopian claims. On the basis that the internet “democratizes” everything, the anti-copyright crowd alleged that artists’ legal rights create artificial scarcity and unjustly “seek rent” from consumers by charging fees to access works. With music, the careless response to artists was that they should forget sales of recorded music (i.e., embrace piracy) and “just tour.” In part, that directive was based on the claim that $12 – $20 was an “extortionate” price for a fan to pay for an album, and that claim was paired with the unexamined analysis that “hardly any of the money goes to the artists anyway,”

But between the streaming platforms siphoning most of the revenue out of the recorded music market and the ticket brokers and resale platforms driving event prices into the stratosphere, I fail to see how the digital age is fostering anything close to the utopian prediction of “abundance” for both music maker and music fan. And none of the billions of dollars referenced by the RMI report goes to the artists. Plus, speaking as a pre-digital-age consumer, I didn’t go to a ton of concerts as a teenager, but ticket prices were not comparable to a semester of college tuition!

This have/have-nots result is bad enough in the event ticket market and ripe for consumer protection measures by the federal government, but RMI’s focus on housing and domain name speculation has even more serious implications for community and business prosperity.

Artificial Scarcity in the Housing Market

Affordable, workforce housing, whether for long-term renters or new homebuyers, is at a crisis condition in many communities around the country. While there are multiple factors to consider, the RMI report notes …

A key factor in [housing] scarcity and price hikes has been homes no longer on the market because they have been monetized by homeowners or investors – either as vacation rentals placed on digital secondary markets such as Airbnb or as part of long-term real estate portfolios by private equity firms, real estate investment trusts (REITs), and large corporations oftentimes financed by private equity groups.

Both Airbnb and private equity (PE) acquisition are cited in the report as having adverse effects on availability, skyrocketing prices, and the character of communities. For instance, the report states that “…residents of Indian Rocks Beach [FL] have called [vacation] rentals a ‘cancer’ that is ‘destroying what was once a peaceful safe community…” At the same time, while not a digital market, “…institutional investors such as Blackstone and Pretium Partners could control 40 percent of U.S. single-family rental homes by 2030,” the report states.

Combine these two effects, and RMI is right to imagine how any American community can become like “Pottersville” in the nightmare sequence from It’s a Wonderful Life, where the soulless, greedy old man Potter owns the whole town. This is a concern of economic, political, and cultural equity. If housing in a community is occupied by a small fraction of wealthy homeowners, a majority workforce population renting from one or two PE landlords, and too many short-term (Airbnb-type) renters, the character and stability of the community are at risk because fewer of the residents have a stake in the life of the community.

As one hypothetical example, if a single PE firm in Manhattan owned 500 rental homes in my small Hudson Valley community, and those investors decide to price out half the long-term renters to make room for vacation (Airbnb) renters, that 250 family loss would be a substantial change at the polls when we vote for school board or county legislators. Meanwhile, the larger volume of vacation renters has both positive and negative effects on the community without any stake as residents. Examples abound, but it is easy to see how predatory acquisition of housing to create a secondary market can hollow out the vibrant center of any community.

Masters of the Domain

No, that’s not a reference to Seinfeld. Rather, “domainers” are the handful of folks who scoop up internet domain names in bulk for the purpose of selling those names at a premium. This practice of “digital real estate flipping,” to borrow the analogy from the RMI report, can cost a startup business a ridiculous amount of money just to obtain their own company name as the .com URL they need. To me, this form of “investing” is like roulette meets ransomware—picking names in advance to hold hostage on the theory that some of the “families” who want those hostages will pay huge sums for their return. Domaining should probably be illegal, but instead, “there are roughly 5,000-10,000 domainers who control between 15 million to 25 million domains (nearly all of which are .COM),” the RMI report states. It also cites this contemporary example:

The day that Pope Francis died, April 21, someone registered PopeLeoIV.com in hopes his successor would choose that name. The domain name is now parked with the email contact (as of May 12, 2025): thisdomainforsale@diginames.com. Presumably, it’s quite pricey. If the new pontiff had chosen to be called Pope John Paul III, that domain name is listed for $1 million.

Again, RMI focuses on both the extortion-level prices charged for domain names and the artificial scarcity of URLs created by domainers. “Millions of domains remain dormant while resellers hold out for high returns. And when these domains are not used but ‘parked’ (left undeveloped), it creates scarcity just like tickets and homes,” the report says. I know through attorney colleagues that even small businesses have paid thousands of dollars they can barely afford to acquire essential domain names; and I had a friend—a widow who didn’t know how to renew a URL for her semi-famous husband’s name—discover that the name quickly fell into the hands of domainers.

Further, the RMI report states that, “When neglected, [parked domains] become targets for bad actors who leverage [the URLs] to redirect traffic to malicious websites or subdomains they create. This tactic enables the criminals to spread malware, steal credentials, and present malicious ads that have viruses.”

Domainers are a classic example of the distinction between the promise of tech-utopians and the reality of the digital market. The bait of “democratization,” i.e., that anyone with an entrepreneurial spirit and a good idea can enter the market, is undermined by the switch of reality that some of the most successful entrepreneurs in the digital age seem to be anyone who devises a new way to hijack fair-market transactions.

The Responsible Markets Initiative recommends a “village approach” involving Congress, private interests, consumer advocates, and law enforcement to address the kind of predatory practices described in this report on secondary markets. To be sure, the overarching lesson of Web 2.0 is that leaving “the internet” to do its thing without oversight has had disastrous effects we are only now acknowledging, let alone addressing. And to RMI’s point, we do not want an otherwise valuable secondary market to become a black market operating in plain sight.

 

Read the Full RMI Report

Photo by Yongkiet

Maybe Now, Copyright Critics Know What Censorship Looks Like

censorship

Twelve years ago, when I first engaged in copyright advocacy, I was surprised to discover how many critics argued that copyright rights conflict with the speech right. Initially, I thought this had to be a fringe, internet thing—a vibe cooked up in the adolescent blogosphere that no legal scholar or expert took seriously. It would seem obviously contradictory to believe that any creative professional opposes the speech right. But no. It became clear that the main theme underlying the anti-copyright agenda—from academia to “digital rights” organizations to Techdirt et al.—was the premise that copyright rights are a means of censorship that should be minimally tolerated, if they are tolerated at all.

To support this view, and especially with regard to enforcing copyright rights online, it was apparently necessary to vilify creators as elitist, greedy, lazy, and even untalented individuals who expected society to pay for their “hobby.” Artists are used to this kind of criticism, historically from ultra-conservative voices, but the allegedly “democratizing” promise of the internet convinced many traditional liberals, and liberal organizations, to parrot this same anti-creator rhetoric.

Those familiar pejoratives are being recycled today by AI developers claiming that their products are just too damn important to let elitist, greedy, lazy creators stand in the way of machine learning. But let’s pause the AI skirmish a moment and back up. Because we should not lose sight of the fact that the original premise—that copyright rights conflict with speech was 1) bullshit; and 2) dangerous bullshit.

I lost count of how many posts, blogs, articles, and academic papers I read and/or rebutted trying to claim that copyright enforcement was making information, criticism, or important new expression disappear. None of those claims have been borne out by evidence, but more insidious was the fact that those who advocated the copyright-is-censorship theme were obscuring what real censorship looks like and, worse, feeding the very mechanisms by which true censors might come to power.

And come to power they have. As the Trump administration and likeminded state officials attack a wide spectrum of both creative and informative speech, will the anti-copyright crowd acknowledge how ridiculous their claims were that authors and publishers were ever the censors? No they will not. Will they acknowledge that the rights of authors are among the constitutional rights being trampled in Trump’s stampede toward national illiteracy? No they will not. Because it ain’t the authors and publishers trying to “memory hole” history. And it was ridiculous to suggest that they ever were.

But worse than the absurd premise that creators’ rights were a meaningful tool of censorship is that the anti-copyright narrative was promoted with substantial funding by the same companies whose technologies were destined to be exploited by the civil rights-infringing kakistocracy that now holds power. This was not just foreseeable; it was almost inevitable. As cited in my last post about the book Careless People, Sarah Wynn-Williams’s description of various authoritarians, including Trump, using the Facebook algorithm to micro-target disinformation is as unsurprising as it is shocking. What the hell did anyone imagine was really financing these “free information” machines? Goofy memes and mash-up videos?

Every time Mark Zuckerberg rebutted the idea of content moderation by saying, “We don’t want to be the arbiters of speech,” he was masking the truth that Facebook would take anybody’s money and guide them to effectively aim any misinformation at any parties for any purpose. It didn’t matter if the narrative was Brexit, the CCP spying on its own citizens, rallying Buddhists into murderous rage in Myanmar, or amplifying every delusional, unconstitutional syllable in Trump’s slow insurrection against the United States. The mantra of yellow journalism was If it bleeds, it leads, but the mantra of social media is If it pays, it stays.

Not that the anti-copyright crowd would ever admit they had anything to do with the damage Trump is doing to the Republic, but at least they might now concede that their claims about copyright making “information disappear” were as unworthy of attention as they were unfounded in fact. As Justice Sandra Day O’Connor famously wrote in Harper and Row v. Nation Enterprises, “The Framers intended copyright itself to be the engine of free expression.” And so it has been. Meanwhile, the tech industry that opposes those rights has proven to be an engine of so many calamities the Framers dearly hoped Americans would avoid.

Photo by Treephwood

Careless People: The Book Meta Doesn’t Want You to Read

careless people

Careless People by Sarah Wynn-Williams could almost be one of Christopher Buckley’s Beltway satires. Like Thank You for Smoking or The White House Mess, the first-person protagonist takes the reader on a journey from dream job to absurd nightmare—each chapter an ironic critique of the powerful characters depicted. Except Wynn-Williams is real, and so are the truly awful people and events she describes. “…like watching a bunch of fourteen-year-olds who’ve been given superpowers and an ungodly amount of money, as they jet around the world to figure out what power has bought and brought them,” she writes in the prologue.

The subtitle, A Cautionary Tale of Power, Greed, and Lost Idealism aptly describes this memoir, which begins with Wynn-Williams’s story of surviving a shark attack at the age of 13 in her native New Zealand and ends with her being escorted by security from the shark-infested headquarters at Facebook twenty-five years later. Hired in 2011 as the Manager of Global Public Policy, Wynn-Williams conveys her initial enthusiasm as a true believer in the power of Facebook to be a force for good and, on that basis, how she pitched the idea of a policy role for herself at a time when the leadership did not yet grasp why the company would need to build relationships with state leaders.

Initially, Wynn-Williams’s expertise as a former New Zealand diplomat reads like a satirical counterpoint to the fumbles of tech-nerds who don’t understand state craft. An early chapter, for instance, describes the visit of German delegates to Facebook’s Washington office and their bewilderment upon seeing the open-plan office with all the facades stripped away to expose the ducts and bare fixtures to “symbolize” the company’s nascent status. “‘You dismantled the furnishings of a proper office to make it look like this? Like it is under construction?’ one of the officials inquired, incredulous,” Wynn-Williams writes.

This image of the deadpan German thinking he is meeting with unserious people would be funny if not for the very real and deadly events that are indeed foreshadowed. As the narrative unfolds like a thriller, the protagonist discovers unbounded arrogance, callousness, hypocrisy—and ultimately—dangerous and criminal conduct among her superiors. The faux feminism of Sheryl Sandberg and lechery of Joel Kaplan become subplots about elite executives whose worst crime against humanity, so far, is arguably Facebook’s role in fostering rampant hate-speech which fueled the Rohingya genocide in Myanmar between October 2016 and January 2017.

As discussed in an earlier post, Senators Hawley et al., motivated in part by Wynn-Williams’s testimony and accounts in the book, have stated an intent to investigate Facebook’s misconduct designed to appease the Chinese Communist Party. But to me, the most compelling part of the memoir is the glimpse into Mark Zuckerberg’s character, especially as a putative oligarch in context to the Trump-led assault on the constitutional order of the United States.

Wynn-Williams’s portrait of Zuckerberg, an avatar of Big Tech leaders, combines the patriarchal vanity of John Galt with the innocent savagery of Jack Meridew—a boy billionaire, who plays board games that his staff let him win, but who ultimately embraces the destructive power he controls. Specifically, the chapters describing Zuckerberg’s psychological process upon learning that Facebook was catalytic to the 2016 election of Donald Trump can be described as denial, anger, pride, and corruption.

During a flight on the private jet to Lima for the Asia-Pacific Economic Cooperation (APEC) summit, Elliot Schrage, VP of global communications, marketing, and public policy, explains to Zuckerberg how, “A Trump operative named Brad Parscale ran the operation together with embedded Facebook staff, and he basically invented a new way for a political campaign to shitpost its way to the White House, targeting voters with misinformation, inflammatory posts, and fundraising messages,” Wynn-Williams writes.

Initially, Zuckerberg clings to the belief that his platform is a neutral conduit for free speech and “connecting people,” but he then becomes angry at the irrefutable evidence presented by Shrage. Then, at the APEC summit, Zuckerberg’s incipient sense of his own power, and test of his character, is described by Wynn-Williams as he is buffeted between foreign leaders kissing his ass one minute and President Obama in a side meeting lecturing him about the dangers of misinformation on Facebook.

Rather than introspection, Zuckerberg responds like a petulant comic book villain—so offended by the criticism of the U.S. President that he decides to use the power of his technology for his own run at the office. “After all, not only does Mark now have Trump’s playbook, he owns the tools and sets the rules,” Wynn-Williams writes. “And he has something no one else has, the ability to control the algorithm with zero transparency or oversight.”

Again, the image of the staff reacting to Zuckerberg’s announcement that he wants to hold events in swing states like Iowa, New Hampshire, Pennsylvania et al. would make great satire but for the fact that, as Wynn-Williams puts it, “He could run for president and not ask anyone for a dime.”

Of course, the real point is not the prospect of President Zuckerberg—at least not yet—but rather Wynn-Williams’s courageous exposure of the mindset behind the allegedly “greatest tool for democracy ever invented.” And she does so at tremendous personal risk–threatened by Meta, which tried to stop publication of the book, tried to stop her testifying before Congress this month, and threatens to sue her for $50,000 per negative comment about the company.

In many ways, Careless People reveals what many of us already knew about Meta and the other social media giants—at least since 2017:  that they are not designed or operated according to principles that ever justified the populist rhetoric of “democratization.” That was a lie more than a decade ago, and the lie is exponential in the battle over development and application of artificial intelligence. Wynn-Williams sums it up well with her thoughts about the travesty in Myanmar:

“I’ve spent a lot of time thinking about what unfolded next in Myanmar, and Facebook’s complicity. It wasn’t because of some grander vision or any malevolence toward Muslims in the country. Nor lack of money. My conclusion:  It was just that Joel, Elliot, Sheryl, and Mark didn’t give a fuck.”