Thursday, November 26, 2015

Turing Refuses To Lower Cost Of Daraprim, Hides News Ahead Of Thanksgiving Holiday

When last we checked in with Martin Shkreli -- founder of Turing Pharmaceuticals and the personification of everything that's wrong with the pharmaceutical industry and mankind -- he was feebly defending his company's decision to jack up the price of a 60-year-old medication some 5000%. Shkreli became America's least liked human being after his company increased the price per pill of Daraprim (used by both AIDS and cancer patients) from $13.50 per pill to $750 per pill. After relentless criticism, Shkreli appeared to backpedal, claiming last September the company would lower prices:
"We’ve agreed to lower the price on Daraprim to a point that is more affordable and is able to allow the company to make a profit, but a very small profit,” he told ABC News. “We think these changes will be welcomed."
Yeah, or not.

Hoping to bury any criticism ahead of the Thanksgiving holiday, Turing released a dodgy press release on Wednesday implying the company had finally seen the error of its ways and would be reducing the cost of Daraprim. Except it's not actually doing anything of the sort. While the company will offer hospitals a 50% discount (now only a 2500% mark up) and is engaging in a few superficial efforts most companies already offer via their patient assistance programs, the press release buries the lede in that the core price of Daraprim isn't going anywhere.

And, just to add insult to injury, a company spokesman insists that's a good thing because (I kid you not) lower drug prices don't benefit patients:
"Drug pricing is one of the most complex parts of the healthcare industry. A drug's list price is not the primary factor in determining patient affordability and access. A reduction in Daraprim's list price would not translate into a benefit for patients."
There's nothing complex about being a raging asshole. There's also nothing complex about a former hedge fund manager jacking up the price of an essential drug 5000% (as is happening with many previously-inexpensive generics), pretending he'd seen the error of his ways, then feebly trying to hide his total lack of integrity ahead of a long holiday weekend.

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FCC Makes It Clear It Thinks Some Net Neutrality Abuses Are 'Innovative' And 'Pro Competition'

If you were wondering whether or not the FCC would bless T-Mobile's new controversial zero rating plans, agency boss Tom Wheeler has given a pretty good indication of which way the agency is leaning. As covered previously, T-Mobile's been aggressively experimenting with zero rating -- first by exempting only the biggest music services from its usage caps -- then more recently by announcing Binge On. Binge On exempts video services from T-Mobile's wireless data caps, but "optimizes" those streams, limiting them to 480p.

T-Mobile tap danced around net neutrality rather cleverly, by making the option something users can disable, while stating that any company that wants to participate can join, for free. The problem remains one of precedent: by opening the doors to carriers as middle men in this fashion, you're fundamentally changing the way the internet works. Companies now need to seek special permission from ISPs to ensure their traffic is on a level playing field. A small streaming company in Cleveland, for example, may not even realize it's being discriminated against, or that it needs to contact T-Mobile to stop it.

The pitfalls are nuanced, and consumers have generally been oblivious to the bad precedent thanks to the lure of "free data" (that's not really free, since usage caps are entirely arbitrary constructs to begin with). And now we can add FCC boss Tom Wheeler to the list of folks who apparently think abandoning a truly open internet is just a nifty idea:
"Wheeler, in a press conference following the FCC's November meeting, appeared to endorse the Binge On offering, calling it pro-competitive and innovative. "It is clear in the Open Internet order that we are pro-competition and pro-innovation and clearly, this meets both of those criteria," he said. "It is highly innovative and highly competitive."
But apparently to appease the six of us that see the potential pitfalls here, the FCC boss then turned around and suggested the agency will be keeping an eye on the program:
"He said the FCC would keep an eye on Binge On per the general conduct standard in those new open Internet rules, which allows the FCC to look at such business models on a case-by-case basis.

That rule, he elaborated, says a carrier "should not unreasonably interfere with the access to someone who is trying to get to an edge provider and an edge provider who is trying to get to a consumer. So, what we are going to be doing is watching Binge On, keeping and eye on it, and measure it against the general conduct rule."
Again, T-Mobile's program may not be the most offensive net neutrality violation ever seen, but the precedent remains horrible. While T-Mobile may be more consumer friendly than other carriers, the simple act of allowing zero rating opens the door to carriers like AT&T and Verizon that are decidedly less so. Meanwhile, Wheeler may be replaced by an FCC boss with an even more flexible interpretation of "innovation" (assuming they're not busy trying to dismantle the rules entirely). This potential for preferential discrimination is why Chile, Norway, Netherlands, Finland, Iceland, Estonia, Latvia, Lithuania, Malta and Japan all moved to prohibit zero rating in some fashion.

The FCC did e-mail me to note that the "Commission staff is working to make sure it understands the new offering," but Wheeler's comments (and previous FCC statements) make it pretty clear that the agency sees usage caps and zero rating as little more than creative pricing. In other words, the agency's telling ISPs: violate net neutrality, just be creative about it. As T-Mobile's program took root, the magenta-hued character that is T-Mobile CEO John Legere was quick to applaud himself:
I don't know. The slow but steady erosion of a healthy, neutral internet to the sound of thunderous applause?

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Tuesday, November 24, 2015

DailyDirt: Did You Wash Your Hands?

Washing your hands with soap is an activity that most Americans probably take for granted. However, even doctors need to be reminded sometimes how important hand washing with soap is. This isn't just a conspiracy from the big "soap industry" for people to use more soap. Plenty of soap is bought and wasted, but hopefully, more people will use soap appropriately and wisely around the world.... Before you go off to wash your hands, take a look at this holiday gift guide for some awesome deals at the Techdirt deals store.

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Tuesday, November 17, 2015

DailyDirt: With Great Fission Power Comes Great Responsibility...

Renewable energy sources like solar and hydroelectric are great, but they generally can't provide enough baseload power. Sure, maybe we need to upgrade our electrical grid to handle more distributed power plants and circumvent traditional baseload power requirements, but in the short term, the only carbon-free power source comes from nuclear reactors. However, after the Fukushima accident, there seems to be growing distaste for nuclear energy -- with Germany closing about half of its nuclear power plants and pledging to close all of them by 2022, and more plants around the world have been closing rather than opening since 2011. Hold on. If you're still reading this, head over to our Daily Deals to save an additional 10% on any item in our Black Friday collection -- using the code: 'EARLY10' -- just through this Sunday, November 22nd.

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Wednesday, November 11, 2015

Daily Deal: Lean Process Project Management Course

Managing your time and resources well is the key to getting any project done well and on time. The Lean Process Project Management Course, available for $49.99, will teach you valuable ways to save time, effort and money on your projects. The 20 hours course focuses on how to prioritize tasks, how to assign tasks to the right person and how to shorten your project's duration. At the end of the self-paced course, you will receive a certificate of completion.


Note: The Techdirt Deals Store is powered and curated by StackCommerce. A portion of all sales from Techdirt Deals helps support Techdirt. The products featured do not reflect endorsements by our editorial team.

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Wednesday, November 4, 2015

Law Professor Pens Ridiculous, Nearly Fact-Free, Misleading Attack On The Most Important Law On The Internet

For the last few years, we've noted a worrying trend of a few law professors, who have decided that the best way to make people nice on the internet is to do away with Section 230 of the CDA. As we've noted repeatedly, Section 230 of the CDA is without a doubt the most important law on the internet. The internet would be a massively different (and worse) place without it. Almost every site or service you use would be very different, and the internet would be a much more bland and sterile place. Section 230 is fairly simple. There are two key elements to it:
  1. People cannot blame service providers for content posted by users.
  2. Service providers who decide to moderate/delete content cannot be held liable for the content they choose not to moderate (or the content they choose to moderate).
The reasoning behind the law should be pretty straightforward. First, you should apply any liability to the person actually doing the speech, rather than the person providing the tool for the speech. We don't blame the phone company when someone makes a threat over the phone. We don't blame the postal service when someone sends mail we don't like. We blame the individuals who actually did the thing.

But, because there are still some people who do terrible things online, a group of people have decided that perhaps the problem is not enough censorship and moderation -- and that yanking away the protection of Section 230 will magically make everyone nice on the internet. This is wrong and ridiculously short sighted. A month ago, we wrote about just such an attack from a minor internet/TV celebrity who clearly just didn't know any better. But now there's a law review article penned by law professor Ann Bartow, and it's a nearly fact-free and clueless attack on Section 230, based on a number of ridiculous to dangerous assumptions.

As if to warn how bad the article will be, it literally starts off with an attack on free speech -- suggesting that we have too much of it, and mocking "First Amendment absolutists" and the US's "unique" view on free speech. It doesn't even begin to acknowledge the results that you get when you take away free speech. From there, she pivots to Section 230, citing Danielle Citron, who has provided inspiration to many other law professors to attack Section 230. Amazingly, Bartow suggests Citron doesn't go far enough:
What she touches on far too briefly are the revenue producing and money saving advantages that Section 230 provides for Internet businesses both big and small. She laments the disgusting websites that profit from hate speech and nonconsensual porn. She expresses less concern about the mercenary corporations that earn billions by hosting, indexing, promoting and advertising these abhorrent websites; huge, “respectable” companies like Yahoo, Google, Facebook, Twitter, Instagram and Microsoft. They launder the proceeds of hate speech, and happily cash the checks.
Arguing that it's all about money is ridiculous. And wrong. We'll get back to that in a second, but let's go on to the next paragraph, where I can say with 100% certainty, that Bartow has no clue what she's talking about:
Anyone hosting a small blog knows that a good flame war or pile on will increase your links and page views, and therefore your advertising income. On a much bigger scale the same incentives apply to the largest ISPs. They create and host platforms designed to attract as much online traffic as possible. They benefit monetarily from popular content that is often hostile and offensive to groups with less power in society, such as sexual minorities, racial minorities, religious minorities, and, as Citron describes in such harrowing detail, to women generally. Under Section 230 the financial incentives for ISPs all fall in favor of ignoring internet harassment. Controversial news reports, gossip blogs and sexy intriguing dating profiles, even when false, generate logons, eyeballs, and browser clicks, all the things that lead to revenue streams. Section 230 enables large ISPs to disclaim any legal or moral responsibility for the harms that online speech can inflict all the way to the bank.
I host a small blog. And Bartow is full of shit here. A "good flame war" does not increase links or page views. It generally involves a very small group of people who just yell at each other and drive most everyone else away. Why do you think so many news sites have been shutting down their comment sections? Furthermore, this shows a lack of understanding of how internet advertising works. Again, a flame war doesn't tend to attract more viewers to an article, it drives many away. It just attracts a small number of participants and those participants don't click on or look at ads. It does not increase ad revenue. This is a confused myth by people who have clearly never managed an ad-supported website.

Furthermore, if your site is nothing but harassment and flame wars, good advertisers stay the hell away. No one wants to be seen advertising on a site that is associated with harassment. And, in addition to that, public pressure has a way of pushing many sites to try to moderate out the worst behavior anyway. Bartow's article seems totally devoid of facts. Based on her description, you wouldn't even know that sites like Reddit and Twitter massively ramped up moderation efforts recently. To some, it's not enough (and to others it's way too much), but Bartow suggests that sites have no reason to do so. Clearly that's not true, because every major website does moderation -- and they have many incentives to do so, from not angering advertisers to general public perception and social pressure.

Bartow's law review article seems to be written in a parallel universe, in which she has no idea how internet sites or internet advertising actually operate.

But, armed with this near total misunderstanding of the internet, Bartow proceeds to suggest an absolutely horrific idea: make CDA 230 more like the DMCA notice-and-takedown process:
Reform must be bolder to have any measurable effect. A more conditional ISP immunity could be framed somewhat along the lines of the Digital Millennium Copyright Act (DMCA). Under the so called “notice and takedown” provisions of the DMCA, when an ISP takes down online information that has been used in a way that a copyright holder alleges was not authorized, it is essentially immune from copyright based liability for distributing infringing materials. If it chooses not to respond to the copyright holder’s demand, however, the ISP may later have to defend its decision not to takedown the disputed material on the merits. Risk aversion usually motivates takedowns. Even now, when victims hold the copyright in photos used to torment them, and ask ISPs to remove them for copyright reasons, ISPs generally remove them with great alacrity to avoid potential liability for copyright infringement. A recalibration of Section 230 immunity could establish a similar framework that creates potential liability when ISPs refuse to assist people whose victimization through online bullying, stalking and harassment they are facilitating and profiting from. Because speech torts are so much harder to prove than intellectual property infringement, takedowns in this realm are less likely to be routine.
This has been suggested before by others, but again, it suggests someone who lives in the world of theory and has no experience with how the internet operates in practice. The DMCA notice-and-takedown process is regularly used as a tool for censorship of content people don't like. Expanding it beyond copyright would just multiply that massively.

Again, as someone who runs a small blog, the number of requests we get from people demanding content be taken down is fairly incredible. It's Tuesday of this week and we've already received requests to take down one story (entirely) and a dozen or so comments on other stories. If we had to follow through on those we'd shut down all comments, and it would take away this entire community. It's not about "making money." It's about not being burdened with constant legal threats and the risk of having to go court because someone is unhappy.

Bartow doesn't think this is a big deal, because she says internet companies can afford it:
The stentorian and self-serving ISP party line is that without Section 230, behemoth online presences like Google, Yahoo, Bing, Facebook, YouTube and Twitter would not exist. Citron appears to accept this argument. But I do not believe it for one second, and you shouldn’t either. If they had to actively respond when their cyber products were actively harming people, just like other companies that make things are usually forced by law to do, their businesses might be less profitable. But they would still be highly profitable. And as long as there is money to be made on the Internet, ISPs will be pursing those dollars.
Yes, perhaps Google, Yahoo, Microsoft (Bing?!?), Facebook and Twitter could afford to deal with it, but they're giant massive companies. Small independent content creators like myself could not. We barely make any money as is. Being liable for others' content would almost certainly force us to shut down.

And that's the real concern that Bartow doesn't seem to acknowledge. The internet is not just those giant companies. It's the fact that anyone can start their own site and have a voice. The people she thinks she's defending -- the marginalized and the harassed -- would be much worse off in the world she thinks she wants. It would turn the internet from an open communications platform that has allowed marginalized groups to speak out, to a broadcast style world, where only the elite had the ability to speak their minds. Perhaps she doesn't mind because she's an elite law professor -- but she should talk to some of the people she thinks she's saving, who have relied on these platforms to make their voices heard.

Bartow claims that she knows sites would still be profitable without Section 230 because these US companies operate outside the US where there is no Section 230. But again, that's a constant risk and more a result of the nature of the internet, rather than anything else. I'm fairly concerned that there are some countries I cannot travel to because of a lack of Section 230 outside the US. The last time I was in Germany I literally had someone accuse me of war crimes because of a comment on Techdirt, and I started counting the hours left until I could get out of the country. Bartow is so sure of herself that she insists she's right despite all the evidence to the contrary.
Section 230 saves ISPs money. That is its real value to them.
No, it protects free speech and enables sites to operate in the first place -- especially smaller internet sites. It's not about "saving money" to me. It's about being able to actually create a forum where people can speak freely. There are tons of other pressures to moderate out the worst of the worst content, and Bartow (again) is simply factually wrong about the "value" of "flame wars" and on how internet advertising works. You'd think that she'd maybe talk to someone who actually has experience in this field before penning such an ignorant law review article, but apparently the Boston University law review doesn't require anything akin to fact checking to publish articles.

From there, Bartow breezily dismisses the fact that execs at Google were found guilty on criminal charges for not taking down a video fast enough, because it was overturned on appeal:
Many multinational ISPs were alarmed when three Google executives were criminally convicted in absentia in Italy for a privacy violation because the company hosted a video in which an autistic child was being bullied. Ultimately, though, the convictions were reversed on appeal, and there is no evidence that a single Internet company stopped doing business in Italy, even though the possibility of future content related arrests remains.
If Bartow really thinks that this has had no impact, then she, again, does not know what she's talking about. Many internet companies are quite fearful of doing business in such countries. We would never open an office there out of fear for the liability. We can operate there from afar because we know we're protected by Section 230 and the SPEECH Act. Again, big companies can afford to fight the liability. Small ones and individual operators cannot.

Finally, Bartow closes with the fact that internet companies are trying to expand in China as a weird sort of "proof" that it's fine for companies to operate under authoritarian regimes that crack down on free speech:
If Section 230 style immunity was critical for any reason other than maximizing profits, no ISP would do business in China, which has a highly censored Internet infrastructure, and actively jails people for criminal speech offenses such as “spreading rumors.” Yet Google is actively trying to expand its presence there. So are Microsoft, Facebook, Linked In, and Twitter just to name a few. All the large Internet companies are operating in China to the maximum extent that the Chinese government will allow, because they can make a lot money there, in spite of the dangers.
When you're pointing to China as your "example" of how it's great to crack down on free speech, you've already lost your argument.

This article is a travesty of ignorance and confusion, culminating in an attack on free speech and the most important law on the internet.

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