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Technology & Marketing Law Blog: The OPEN Act: Significantly Flawed But More Salvageable Than SOPA/PROTECT-IP

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The OPEN Act: Significantly Flawed but more Salvageable than SOPA/PROTECT-IP

Sen. Wyden and Rep. Issa have released a draft of OPEN: Online Protection & ENforcement of Digital Trade Act, intended as an alternative to SOPA/PROTECT-IP. See my prior posts opposing SOPA and linkwrapping the discussion. unlike SOPA’s disgustingly blatant rent-seeking, which was such an over-the-top abuse of the legislative process that it did not (and could not) support a principled or even intelligent conversations about it, OPEN provides a useful starting point for a sensible conversation that could actually lead to acceptable compromises. for that reason alone, I think Congress should immediately stop all work on SOPA/PROTECT-IP and redirect that energy towards vetting this proposal. having said that, for reasons I’ll explain in a moment, I continue to believe the assumptions underlying SOPA/PROTECT-IP and OPEN are misguided, meaning that forging a compromise from OPEN’s more sensible proposal may be tricky.

Before I get further into substance, two process notes:

First, SOPA was the product of rent-seekers who were talking only amongst themselves and legislators tethered to their campaign contributions. The drafting process was disturbingly closed-door and exclusionary, exactly the kind we wish didn’t take place in our representative democracy. in contrast, the OPEN sponsors want to have a dialogue about their ideas. in support of that, they have posted the draft to a website that allows comments and discussion. this is the way our democracy SHOULD work. Why is such an open process the exception instead of the rule?

Second, OPEN is a comparatively svelte 18 pages focused mostly on one core concept, compared to SOPA’s 78 page monstrosity that advanced about a dozen different substantive proposals. I can’t tell you the number of times I’ve seen very smart people stymied to keep all of SOPA’s moving parts separate, and the failure to do so meant that they were conflating different parts of the statute in ways that prevented productive discussion. (Just two examples: the Colbert Report, where Zittrain mostly focused on SOPA’s felony streaming provision while his counterpart was mostly talking about the cutoff provisions; and Business Insider’s infographic where the felony streaming sanction was presented as a remedy to the cutoff provisions). by reducing the number of topics at issue, OPEN substantially reduces the chance that policy discussants will simply talk past each other.

An Overview

The law contemplates that rightsowners can file a petition against rogue websites at the ITC, an independent federal agency best known for its adjudication of certain patent disputes. in response to the rightsowners’ petition, the ITC will conduct an administrative adjudication. if the ITC determines that the website is a rogue website, then (1) the website is required to cease its conduct (not sure how enforceable that is), (2) the site also will be subject to any other unspecified consequences following from its determination as a rogue actor, and (3) most importantly, the rightsowner can take the ITC determination to payment service providers (PSPs) and ad networks and have them cut off the flow of money to the rogue website. The PSPs and ad networks would be protected by several immunities for trying to comply with the orders or their other efforts to protect the public.

This makes OPEN similar to SOPA in that it seeks to cut off funds flowing to rogue actors. However, among other key differences, PSPs and ad networks have no legal obligations until the ITC makes a ruling. in contrast, SOPA imposed cutoff obligations on PSPs and ad networks based merely on rightsowners’ unsubstantiated assertions.

What’s Good

Substantively, some of the things I liked about OPEN:

* it situates the discussion about “rogue websites” in foreign trade policy. this fixes SOPA’s overinclusive application to both domestic and foreign actors. However, if we really think rogue websites are a transborder enforcement problem, there are many other trade policy solutions that might be better options to consider—the most obvious being transborder enforcement coordination like the FTC does with its foreign counterparts.

* OPEN doesn’t touch the domain name system or search engines. SOPA had the potential to destroy the DNS and to jeopardize search engine functioning. OPEN sidesteps both pitfalls.

* OPEN builds in some due process before any formal legal obligations attach. As we’ve recently seen, due process is actually quite important, and we suffer from its absence. I say “some” due process because I’m not sure how much due process will attach in practice. for example, I have some concerns about the notice provision–not every targeted website will receive notice of the ITC investigation. However, I did like that any website the ITC labels as rogue can correct any identified problems, reapproach the ITC and ask it to remove the “rogue” determination.

* the definition of rogue website is tightened up substantially. It requires three elements:a) a “non-domestic domain name,” which requires that the registry, registrar and registrant all have to be located outside the US (I’m not sure what “located” means in this context). Venkat asked me what happens to a .com registered with a foreign registrar; I believe OPEN does not apply to this domain name.b) conducting business in the US; and c) “has only limited purpose or use other than engaging in infringing activity and whose owner or operator primarily uses the site to willfully engage in infringing activity.”

The last element, in particular, is quite restrictive by requiring willful infringement. The meaning of the word “willful” is notoriously murky (see, e.g., the multitudinous Supreme Court cases over the word), so the statute would be improved by using a more detailed synonym. No matter what, though, willful is a high scienter level that should easily exclude most legitimate players. The statute further expressly excludes any sites that:

- follow good notice-and-takedown procedures- qualify for 17 USC 512 (the DMCA online safe harbors) [this means that the statute sits next to 512 instead of rendering 512 moot like SOPA threatened to do], or- distribute “copies that were made without infringing a copyright or trademark.” I’m not 100% sure what this means. It apparently excludes websites reselling goods covered by the first Sale doctrine. I presume that the exclusion includes sites that sell legitimate knock-off goods, such as replicas of goods that aren’t protected by copyrights or trademarks.

* if a PSP or ad network fails to comply with an ITC order, the only consequence is that the DOJ can seek injunctive relief. Rightsowners do not have a private cause of action in those cases. As discussed below, this doesn’t eliminate all PSP/ad network exposure to rightsowners, but rightsowners can’t introduce evidence of ITC orders in any civil suits they bring against PSPs or ad networks.

* on the trademark side, it expressly limits its applicability to counterfeiting (although there is a erroneous cross-reference in the draft). Presumably, dilution or garden-variety trademark infringement disputes don’t qualify under the statute.

What’s not Good

Substantively, some of the things I don’t like about OPEN:

* OPEN still contemplates reestablishing a Fortress USA. Fortress USA marginally makes sense regarding the shipment of physical goods across geographic borders. It makes zero sense for digital bits zinging around the borderless network.

* in particular, because OPEN would burden only US-governed PSPs and ad networks, it may drive websites—including legitimate websites who want to reduce their risk of being mistargeted—to shift their business to foreign-based PSPs and ad networks. if lots of businesses make a switch based on these concerns, OPEN could counterproductively result in net financial losses for the US economy.

* similarly, foreign websites can opt-out entirely of the ITC process by consenting to US judicial jurisdiction. I like the idea of an opt-out, but imagine if other countries offered the same quid-pro-quo of allowing US websites to opt-out of some nasty foreign process so long as the websites consent to jurisdiction in their countries. I think we’d be outraged and insulted; which is how I would expect foreign countries to view this quid-pro-quo. Cf. Venkat’s recent post on Facebook v. Faceporn. Then again, other countries might think it’s a pretty good idea, leading to a proliferation of transborder quid-pro-quo jurisdictional offers.

* designating the ITC to conduct the investigations is a little odd. first, the ITC is an administrative agency, not a federal court. I don’t fully understand all of the implications of administrative vs. judicial review, but I believe there are substantial procedural differences that could lead to important substantive differences. second, the ITC has been gamed in the patent world (see, e.g., my colleague Colleen Chien’s research on the ITC explaining how the ITC hears many US company vs. US company disputes), so I fear similar gaming will emerge. for example, a rightsowner chasing a rogue website could simultaneously pursue a domestic court action, a foreign court action and an ITC proceeding. how would these types of parallel proceedings play out in practice? We’re still trying to resolve the parallel proceeding problems in patents.

* like SOPA, the bill covers copyright infringement, trademark infringement *and* 1201 circumvention. I don’t understand why the circumvention issue is getting equal billing or how often transborder circumventions are a real problem. seeing how 1201 circumvention lawsuits have devolved into anti-competitive enforcements, picking up the circumvention piece could increase the risk of competitive misuse of the statute.

* like SOPA, the definitions are vague. consider, for example, the definition of Internet advertising service:

The term Internet advertising service means a service that serves an online advertisement in viewable form for any period of time on an Internet site.

Hmm…what does that mean? Notice that the definition doesn’t directly distinguish between third-party ad networks and sites that sell their own ads. I think in practice sites that sell their own ads drop out of the statute, so one possible implication is that more sites will ramp up their own ad sales. (This is doubtful, but just throwing the possibility out there). I think the focus on “viewable” is interesting; are audio-only ads excluded? and what does it mean to “serve” content? this contemplates a specific technological interaction that I don’t fully understand today and will almost certainly evolve over time.

Why I’m not Enthusiastic About OPEN

Even though OPEN is worth discussing intelligently, unlike SOPA, I believe it’s based on two underlying assumptions that aren’t fixable.

First, like SOPA, OPEN assumes there is a problem with foreign rogue websites that needs to be solved. I’m not saying there isn’t, but the policy discussions have been startlingly devoid of reliable and credible facts demonstrating the nature and scope of the problem.

Instead, the evidence in support of a rogue website “problem” typically consists of two main threads: (a) people are dying from counterfeit drugs, and (b) bad guys are “stealing” our stuff. With respect to the former, I’ve never seen anything more than ad hoc assertion; but if there’s a real problem, counterfeit drugs can be fixed with a highly targeted solution. With respect to the latter, it’s hard to give those arguments much credit. after all, all of rightsowners’ arguments are inherently self-interested: it’s in their financial interest to say that they would like to make more money than they are making. It’s also in their interest to bemoan broad sectoral changes in the economy as evidence that someone is capturing money they think they are entitled to (and to use rent-seeking to thwart those broad sectoral changes). more importantly, there is lots of evidence that a lot of rightsowners are making a lot of money today, both via the Internet and more generally. So it’s hard to break out the quantity of actual economic losses that rightsowners are truly suffering when those claims are intermingled with rightsowners’ general rent-seeking efforts.

Therefore, until the rightsowners offer us more than the trumped-up BS already-discredited statistics, I’m still not clear on the problem, how bad it is, how any legislative solution would remediate that problem, and if the collateral consequences of the effort to remediate the problem are greater or less than the problem itself. OPEN does nothing to fill the void of supporting foundational evidence of the problem, so it’s hard for me to be enthusiastic about its solution.

Second, and more importantly, attacking the money supply to supposed bad actors remains too blunt an instrument. I may be truly on my own on this point, as many people I respect–including, notably, Rep. Lofgren–are prepared to embrace the policy solution of cutting off money flows. However, by embracing an attack on the movement of money, OPEN replicates one of SOPA’s sins. if a player is engaged in legitimate and illegitimate activity and its money supply is cut off, both activities go down the tubes. in contrast, one of the positive aspects of 17 USC 512(c) and (d) is that they require the copyright owner to identify infringing items and target only those items. Giving rightsowners a remedy that would affect an entire site for only some items on the site goes too far.

The OPEN bill tries hard to minimize overbreadth by narrowly defining the targeted websites. Perhaps this definition is narrow enough that there won’t be much collateral damage. However, in practice, regulating money flows nevertheless could have pernicious effects in the field. A PSP or ad network drawn into an ITC proceeding frequently will “voluntarily” choose to toss the targeted website before the ITC proceeding reaches its conclusion—even if the ITC proceeding would have rejected the challenge. Furthermore, rightsowners still will send cutoff notices to PSPs/ad networks without filing any ITC petition, and the PSPs/ad networks will often honor them as a way of preempting an ITC proceeding.

What this teaches me (in combination with the Elsevier v. Chitika case) is that PSPs and ad networks need robust statutory immunities which are not based on a notice-and-takedown scheme. On the trademark side, the need for an immunity became clear after the sloppy language in Gucci v. Frontline. On the copyright side, 512 doesn’t cover PSPs and ad networks, probably because in a million years the safe harbor drafters never thought PSPs and ad networks would be liable for third party infringing activity in the first place. Now that we’ve seen copyright law and trademark law creep much further than we could have imagined in 1998, we should plug this liability hole completely. if OPEN proceeds, it should have a broad-based immunity for PSPs and ad networks with the idea that rightsowners are getting a specific remedy against them in the new law.

While OPEN can’t really be fixed to resolve my two structural concerns, my hope is that the discussion about OPEN will force rightsowners to provide *credible* evidence of harms that they or consumers are suffering (no more self-serving hype, please), and that such evidence will force us to think carefully about how “rifle shot” solutions (as opposed to shotgun solutions) can ameliorate those harms. if we have a discourse that even slightly resembles this ideal, then OPEN will be successful no matter what final outcome we reach.

Posted by Eric at December 10, 2011 09:55 AM | Copyright, Derivative Liability, Search Engines, Trademark

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War on Iran has already begun. Act before it threatens all of us « Al Hittin

Escalation of the covert US-Israeli campaign against Tehran risks a global storm. Opposition has to get more serious

By Seumas Milne

They don’t give up. after a decade of blood-drenched failure in Afghanistan and Iraq, violent destabilisation of Pakistan and Yemen, the devastation of Lebanon and slaughter in Libya, you might hope the US and its friends had had their fill of invasion and intervention in the Muslim world.

It seems not. For months the evidence has been growing that a US-Israeli stealth war against Iran has already begun, backed by Britain and France. Covert support for armed opposition groups has spread into a campaign of assassinations of Iranian scientists, cyber warfare, attacks on military and missile installations, and the killing of an Iranian general, among others.

The attacks are not directly acknowledged, but accompanied by intelligence-steered nods and winks as the media are fed a stream of hostile tales – the most outlandish so far being an alleged Iranian plot to kill the Saudi ambassador to the US – and the western powers ratchet up pressure for yet more sanctions over Iran’s nuclear programme.

The British government’s decision to take the lead in imposing sanctions on all Iranian banks and pressing for an EU boycott of Iranian oil triggered the trashing of its embassy in Tehran by demonstrators last week and subsequent expulsion of Iranian diplomats from London.

It’s a taste of how the conflict can quickly escalate, as was the downing of a US spyplane over Iranian territory at the weekend. what one Israeli official has called a “new kind of war” has the potential to become a much more old-fashioned one that would threaten us all.

Last month the Guardian was told by British defence ministry officials that if the US brought forward plans to attack Iran (as they believed it might), it would “seek, and receive, UK military help”, including sea and air support and permission to use the ethnically cleansed British island colony of Diego Garcia.

Whether the officials’ motive was to soften up public opinion for war or warn against it, this was an extraordinary admission: the Britain military establishment fully expects to take part in an unprovoked US attack on Iran – just as it did against Iraq eight years ago.

What was dismissed by the former foreign secretary Jack Straw as “unthinkable”, and for David Cameron became an option not to be taken “off the table”, now turns out to be as good as a done deal if the US decides to launch a war that no one can seriously doubt would have disastrous consequences. but there has been no debate in parliament and no mainstream political challenge to what Straw’s successor, David Miliband, this week called the danger of “sleepwalking into a war with Iran”. That’s all the more shocking because the case against Iran is so spectacularly flimsy.

There is in fact no reliable evidence that Iran is engaged in a nuclear weapons programme. The latest International Atomic Energy Agency report once again failed to produce a smoking gun, despite the best efforts of its new director general, Yukiya Amano – described in a WikiLeaks cable as “solidly in the US court on every strategic decision”.

As in the runup to the invasion of Iraq, the strongest allegations are based on “secret intelligence” from western governments. but even the US national intelligence director, James Clapper, has accepted that the evidence suggests Iran suspended any weapons programme in 2003and has not reactivated it.

The whole campaign has an Alice in Wonderland quality about it. Iran, which says it doesn’t want nuclear weapons, is surrounded by nuclear-weapon states: the US – which also has forces in neighbouring Afghanistan and Iraq, as well as military bases across the region – Israel, Russia, Pakistan and India.

Iran is of course an authoritarian state, though not as repressive as western allies such as Saudi Arabia. but it has invaded no one in 200 years. it was itself invaded by Iraq with western support in the 1980s, while the US and Israel have attacked 10 countries or territories between them in the past decade. Britain exploited, occupied and overthrew governments in Iran for over a century. so who threatens who exactly?

As Israel’s defence minister, Ehud Barak, said recently, if he were an Iranian leader he would “probably” want nuclear weapons. Claims that Iran poses an “existential threat” to Israel because President Ahmadinejad said the state “must vanish from the page of time” bear no relation to reality. Even if Iran were to achieve a nuclear threshold, as some suspect is its real ambition, it would be in no position to attack a state with upwards of 300 nuclear warheads, backed to the hilt by the world’s most powerful military force.

The real challenge posed by Iran to the US and Israel has been as an independent regional power, allied to Syria and the Lebanese Hezbollah and Palestinian Hamas movements. As US troops withdraw from Iraq, Saudi Arabia fans sectarianism, and Syrian opposition leaders promise a break with Iran, Hezbollah and Hamas, the threat of proxy wars is growing across the region.

A US or Israeli attack on Iran would turn that regional maelstrom into a global firestorm. Iran would certainly retaliate directly and through allies against Israel, the US and US Gulf client states, and block the 20% of global oil supplies shipped through the Strait of Hormuz. quite apart from death and destruction, the global economic impact would be incalculable.

All reason and common sense militate against such an act of aggression. Meir Dagan, the former head of Israel’s Mossad, said last week it would be a “catastrophe”. Leon Panetta, the US defence secretary, warned that it could “consume the Middle East in confrontation and conflict that we would regret”.

There seems little doubt that the US administration is deeply wary of a direct attack on Iran. but in Israel, Barak has spoken of having less than a year to act; Binyamin Netanyahu, the prime minister, has talked about making the “right decision at the right moment”; and the prospects of drawing the US in behind an Israeli attack have been widely debated in the media.

Maybe it won’t happen. Maybe the war talk is more about destabilisation than a full-scale attack. but there are undoubtedly those in the US, Israel and Britain who think otherwise. and the threat of miscalculation and the logic of escalation could tip the balance decisively. unless opposition to an attack on Iran gets serious, this could become the most devastating Middle East war of all.

The American Jobs Act: What's in it for you

Before I became the nation’s secretary of labor, I was a legislator for 16 years. Whenever a new bill was introduced, I would encourage my constituents to ask two questions:

First: “What’s in it for me?”

Second: “What’s in it for my community?”

Today in Tampa, I’ll visit with construction workers, small business owners, community stakeholders and local residents to help them answer those questions as Florida lawmakers consider whether to support key provisions of President Obama’s American Jobs Act.

It’s a bold plan — with ideas from both Democrats and Republicans — that, according to independent economists, could add nearly 2 million jobs to our economy without adding a dime to the deficit. And independent national polls show that an overwhelming number of Americans feel it will create jobs and ensure that everyone pays their fair share.

Florida needs the American Jobs Act. In 2007, there were 572,600 people employed by Florida’s construction sector. Today, that number is down to 328,800.

The Sunshine State is home to 31 major airports, 14 deepwater ports and dozens of bridges. Investing in Florida’s rails, ports and airports would generate thousands of local jobs, not only for construction workers but for engineers, architects, designers, project managers and urban planners, too. The American Jobs Act would invest more than $1 billion in Florida’s transportation system — an investment that would put about 20,000 people back on the job.

Despite obvious benefits and strong public support, Senate Republicans continue to block this effort to boost our economy, put Floridians back to work and cut taxes for families. If this lockstep effort continues, Florida families and businesses will continue to suffer. Taxes would go up, and opportunities for new jobs would vanish.

As we approach Veteran’s Day, it’s worth noting that the American Jobs Act would help to put vets in Tampa and across the nation into good jobs they not only need, but also rightfully deserve.

During the past two months, the unemployment rate for the post-9/11 generation of veterans has climbed to 12.1 percent — more than 3 percentage points above the civilian unemployment rate.

Our veterans risked their lives to fight for our freedoms overseas. They should not have to fight for a job when they come home.

That’s why the president is urging Congress to pass the veterans tax credit piece of the American Jobs Act. This includes a new Returning Heroes Tax Credit for businesses that hire unemployed veterans with a credit of $5,600 per hire. The American Jobs Act also includes an increase in the existing Wounded Warriors Tax Credit of up to $9,600 for each veteran a firm hires with a service-connected disability who has been unemployed for an extended period of time.

But we won’t wait in giving back to our veterans.

The president also has announced a Veteran Gold Card to deliver enhanced job search services to post-9/11 veterans and introduced an online tool from my department called My Next move for Veterans. It allows vets to directly link their military skills to civilian occupations and connect with employers who are hiring.

So, what’s in the American Jobs Act for you and your community?

The answer is clear: more jobs, more money in your pocket and more progress in putting Florida back to work.

It’s time for members of Congress to put country ahead of party and listen to the people they were elected to serve. Their most important job is to fight for yours.

BERNAMA – Sarawak Not Ready For Renewable Energy Act: Chin

November 08, 2011 16:47 PM

Sarawak Not Ready for Renewable Energy Act: Chin

MIRI, Nov 8 (Bernama) — the Sarawak Government has yet to decide on whether to enforce the Renewable Energy Act which was passed in Parliament in April, Energy, Green Technology and Water Minister Datuk Seri Peter Chin said here Tuesday.he said the state prefers to study the progress of the act’s implementation in Sabah and Peninsular Malaysia before making a decision.”We would not be able to “force” Sarawak to accept this RE (Renewable Energy) Act unless they want it,” he told reporters after opening an international conference at Curtin University Science and Engineering here.in his speech earlier, Chin described the Act as an important piece of legislation that would create a conducive environment for renewable energy to grow in an effective and sustainable manner.”This Act is a catalyst for renewable energy generation and it is also aligned with the Malaysian government’s aim to achieve 5.5 per cent renewable energy in the country’s total energy mix by 2015,” he said.Chin said renewable energy capacity in the country is expected to reach 2,080MW or approximately 11 per cent of the total peak electricity demand capacity by 2020.”In terms of GHG (Green House Gases) emissions, an accumulated 42 million tons of CO2 (carbon dioxide) could be avoided due to the renewable energy generated power during the period,” he said.he said the Act provides a Feed-in-Tariff (FiT) mechanism to enable interested parties to develop renewable energy in a safe and secure manner as the electricity can be sold to utility companies over a guaranteed period.Under this law, up to 30MW of electricity generated from four renewable sources — solar photovoltaic, biogas, biomass and small hydro — are eligible for connection to the national grid and the power generated could be sold back to the utility companies, he said.”The FiT mechanism has an incentive structure to encourage the growth of renewable energy,” he added.– BERNAMA

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Japan says to act decisively on excessive forex moves (Reuters)

TOKYO (Reuters) – Japan’s finance minister said on Saturday he would take decisive action against excessive and speculative yen moves, Kyodo news agency reported, threatening to conduct currency intervention after the yen rose to a record high against the dollar.

Jun Azumi was also quoted by Kyodo as saying that the yen’s appreciation was not so much a reflection of Japan’s economic fundamentals, but reflected the relative economic conditions in Japan, Europe and the United States.

“I would like to take decisive action on excessive and speculative movements,” Azumi was quoted by Kyodo as telling reporters.

“We’re in a situation where the foreign exchange rates would wipe out earnings by hard working companies.”

His comments came after the U.S. dollar tumbled on Friday and hit a record low against the yen on speculation Europe was closer to solving its debt crisis.

The dollar fell as low as 75.78 yen on trading platform EBS, surpassing its

Read More from the Article Source: us.rd.yahoo.com/dailynews/rss/business/*http%3A//news.yahoo.com/s/nm/20111022/bs_nm/us_japan_economy_azumi

MAPLE Act Would Make Selling Fake Maple Syrup a Felony

Some Northeastern Senators want to make selling fake maple syrup a federal offense.

The Hill (“Senate bill would make selling fake maple syrup a felony offense“):

Six senators introduced legislation that would make selling fake maple syrup a felony offense leading to fines and up to five years in prison.

The Maple Agriculture Protection and Law Enforcement (MAPLE) Act is a response to what chief sponsor Sen. Patrick Leahy (D-Vt.) and others say is the increasing practice of cheating Vermont, Upstate new York and other maple syrup regions by selling inferior, fake syrup.

“I have been alarmed by the growing number of individuals and businesses claiming to sell genuine Vermont maple syrup when they are in fact selling an inferior product that is not maple syrup at all,” Leahy said Thursday. “this is fraud, plain and simple, and it undermines a key part of Vermont’s economy and reputation for quality that has been hard-earned through Vermonters’ hard work.”he added that others in the syrup-producing regions of Maine, new York and other states also have been hurt. Sens. Susan Collins (R-Maine), Kirsten Gillibrand (D-N.Y.), Bernie Sanders (I-Vt.), Charles Schumer (D-N.Y.) and Olympia Snowe (R-Maine) are all co-sponsors.

Under current law, selling fake maple syrup is a misdemeanor offense.

Under the bill, S. 1742, selling fake maple syrup would be listed as an act of fraud that is seen as a felony offense, along with falsifying bank entries, mortgage transactions, loan applications and citizenship records, along with dozens of other activities.

Doug Powers is having a lot of fun with this one.

When it comes to sap, there’s no group of senators I trust more to know their stuff.

Selling fake maple syrup is currently merely a misdemeanor, but if the “Syrup Six” have their way, it will be a felony, and the following conversation may soon take place in a high security prison near you:

“What’cha in for?”

“Armed robbery. You?”

“Counterfeit waffle topping.”

His commenters pile on with such gems as, “do you think maybe if we buttered those guys up they wouldn’t be so cranky?” and “I heard Eric Holder is involved by allowing fake maple syrup to be run across the Canadian Border — code named “slow and Sticky.”

It’s true that the scourge of fake syrup is hardly at the top of the national agenda, what with a global recession, sky high unemployment, and more wars than you can shake a stick at. Still, this certainly seems like a perfectly valid case of Senators representing the legitimate interests of their constituents and bringing an issue to the national debate. presumably, those who bother to manufacture and sell fake maple syrup do so on a large scale, so I don’t have any problem treating it as a felony; it is, after all, deliberate fraud. And, to the extent the sales are going across state lines, it’s actually a real federal issue. Vermont can’t very well arrest people in Arkansas for selling “Authentic Vermont Maple Syrup” that’s neither authentic, maple, nor made in Vermont.

Amusingly, however, I vastly prefer mrs. Butterworth’s to actual maple syrup. I find the former’s taste much more complex and texture more conducive to coating breakfast products, whereas the latter is essentially liquid sugar and horrifically sweet. but that’s not marketed as “maple syrup,” so presumably the mrs. is safe.

EPAL’s scare tactics

Eftpos Payments Australia managing director Bruce Mansfield had a go at scaring his former employer Visa yesterday  telling the Australian Financial Review EPAL is considering a solution for international transactions.

EPAL is currently piloting a new card containing chip technology, which basically brings it in line with Visa and MasterCard branded debit cards. thanks to the Reserve Bank’s changes to interchange fees, and some smart marketing by the card schemes, Australia’s banks have ensured branded cards are now widely in circulation.

To really take on the card giants, EPAL has a significant journey ahead, with mobile payments planned for 2012, and online payments not on the roadmap until 2013.

Now that BPAY’s proposed MAMBO project is defunct, EPAL probably feels it has a little more time up its sleeve to get online payments right.

One of the reasons MAMBO received criticism was because it didn’t offer a real solution for international transactions, something eWise has been pushing for through the International Council of Payment Network Operators.

Watch out for PayPal

But it’s not any of these players that EPAL really needs to worry about. It’s PayPal and cash that will be its real foes.

New research conducted by Nielsen has found PayPal is the most popular payment option for online purchase, with 51 per cent of Australians surveyed having used the payment method to buy online, compared with 43 per cent for credit cards, 25 per cent using direct debit or transfers, and 24 per cent using a debit card. 

For offline purchases, cash is the big winner, with 45 per cent having used cash, versus 33 per cent for Eftpos, and 32 per cent for debit cards. It’s here that you’d expect EPAL to have a real opportunity. a massive 85 per cent cite cash as the most regularly used offline payment method.

But that’s only half the story, since PayPal research shows cash is king predominantly due to a lack of choice.

Three quarters of Australians surveyed by Nielsen cite that they need cash for small items and close to half claim that some retail outlets only accept cash and that there are limits imposed by retailers on the minimum amount accepted on card transactions.

So EPAL will join Visa and MasterCard in taking on cash. EPAL’s decision to fund its new businesses with scheme fees charged to both issuing and acquiring banks is an experiment that has raised the ire of smaller retailers that expected banks to pass on the new fees. 

Getting cash users to shift

EPAL seems hopeful that its decision not to charge fees for transactions valued under $15 will encourage typical cash users to switch to Eftpos, but that assumes more retailers come on board with contactless payments, and banks and PayPal don’t deliver their own alternatives at the point of sale.

Next week the Commonwealth Bank will reveal its latest offering in the mobile payments space. The bank has previously said it is evaluating contactless mobile payment options, but it is also likely to deliver some sort of peer-to-peer payments solution, similar to that already offered by PayPal and ANZ.

With ANZ’s technology focus shifting away from single-market solutions such as its GoMoney service, and towards initiatives that it can deploy region-wide, the local mobile payments market remains somewhat open to competitors.

Google Wallet, and, as Jason Bryce discussed last week, Apple, are the two players to watch closely.

If one brand can get it right, the research points to Australians embracing it wholeheartedly. according to PayPal, 40 per cent of consumers want fewer, or only one payment method that would make it easier for them to keep track of how much they are spending.

The organisation that can deliver real-time payments and account balance data, combined with offers and convenience at the point of sale, could shift the entire market.