The Volokh Conspiracy

Mostly law professors | Sometimes contrarian | Often libertarian | Always independent

The FTC Doubles Down, Down, Down

Episode 468 of the Cyberlaw Podcast


This episode of the Cyberlaw Podcast kicks off with coverage of a stinging defeat for the FTC, which could not persuade the courts to suspend the Microsoft-Activision Blizzard acquisition. Mark MacCarthy says that the FTC's loss paves the way for a complete Microsoft victory, as other jurisdictions begin to trim their sails. We credit Brad Smith, Microsoft's President, whose policy smarts likely helped to construct this win.

Meanwhile, the FTC is still doubling down (and down) in its pursuit of aggressive legal theories. Maury Shenk explains the agency's investigation of OpenAI, which raises issues not usually associated with consumer protection. Mark and Maury argue that this is just a variation of the tactic that made the FTC the de facto privacy regulator in the U.S. I ask how policing ChatGPT's hallucinatory libel problem, which the FTC seems disposed to do, constitutes consumer protection, and they answer, plausibly, that libel is a kind of deception, which the FTC does have authority to regulate.

Mark then helps us drill down on the Associated Press deal licensing its archives to OpenAI, an arrangement that may turn out to be good for both companies.

Nick Weaver and I try to make sense of the district court ruling that Ripple's XRP is a regulated investment contract when provided to sophisticated buyers but not when sold to retail customers in the market. It is hard to say that it makes policy sense, since the securities laws are meant to protect retail customers more than sophisticated buyers. But it does seem to be at least temporary good news for the cryptocurrency exchanges, who now have a basis for offering a token that the SEC has been calling an unregistered security. And it's clearly bad news for the SEC, signaling how hard it will be for the agency to litigate its way to the Cryptopocalypse it has been pursuing.

Andy Greenberg makes a guest appearance to discuss his WIRED story about the still mysterious attack that gave Chinese cyberspies the ability to forge Microsoft authentication tokens.

Maury tells us why Meta's Twitter-killer, Threads, won't be available soon in Europe. That leads me to reflect on just how disastrously Brussels has managed the EU's economy. Fifteen years ago, the U.S. and EU had roughly similar GDPs, about $15 trillion each. Today, EU GDP has scarcely grown, while U.S. GDP is close to $25 trillion. It's hard to believe that EU tech policy, which I've dubbed EUthanasia, hasn't contributed to continental impoverishment, which, Maury points out, is so bad it's even making Brexit look good.

Maury also explains the French police drive to get explicit authority to conduct surveillance through cell phones. Nick offers his take on FISA section 702 reform. And Maury evaluates Amazon's challenge to new EU content rules, a challenge that he thinks has more policy than legal appeal.

Not content with his takedown of the Ripple decision, Nick reviews the week's criminal prosecutions of cryptocurrency enthusiasts. These include the Chinese bust of Multichain, the sentencing of Variety Jones for his role in the Silk Road crime market, and the arrest of Alex Mashinsky, CEO of the cryptocurrency exchange Celsius.

Finally, in quick hits,

Download 468th Episode (mp3)

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